Governor s $3,448,619.

Transcription

1 M E M O R A N D U M TO: Board of Directors Governor s Board of Economic Developmentt FROM: Mike Dang, Director of Business Operationss & Business Development Date: October 21, 2016 SUBJECT: TH Foods, Inc. APPLICATION FOR TAX ABATEMENTS AND INCENTIVES TH Foods, Inc. ( Company ) applied for and was awarded the following incentives at the March 20, 2014 Board meeting: 1. Sales Tax Abatement (to 2%) The Company's continued strong growth requires the installation of a fourth production line in the company's Henderson, NV facility. The Company comes before the Board now to apply for the incentives to assist and support their expansion project: following abatements and 1. Sales Tax Abatement (to 2%) 2. Modified Business Tax Abatementt (50% for 4 years) 3. Personal Property Tax Abatement t (50% for 10 years) Approval of these abatements s, when combined withh those approved at the May 19, 2014 Board meeting would bring their total package of abatements to an estimated value of $3,448,619. The Company produces snack food products for customerss worldwide and is based Loves Park, IL and Henderson, NV. The Company operates as a subsidiary of Mitsubishi International Corporation.

2 Board Summary TH Foods, Inc Harlem Road, Loves Park, IL Date: November 17, 2016 Main Location: Carson City, Nevada Terry Jessen, President and C.O.O. Cookie / Cracker Manufacturing Business Type: Expansion County: Clark County Development Authority Representative: Morgan Bunker - LVGEA APPLICATION HIGHLIGHTS - TH Foods, Inc.'s continued strong growth requires the installation of a fourth production line in the company's Henderson, NV facility. - All the company's baked products utilize proprietary Japanese technology. The company is the only manufacturer in North America with the technology to make authentic Usuyaki (Japanese for thin & flat) style rice crackers. PROFILE TH Foods, Inc. produces snack food products for customers worldwide. The company produces snack crisps, baked sesame sticks, fried sesame sticks, corn sticks, baked wheat crackers, and rice based snacks. TH Foods, Inc. was founded in 1984 and has operations in Loves Park, IL and Henderson NV. The company serves private label, food service distributors, industrial, and contract manufacturing customers. TH Foods, Inc. operates as a subsidiary of the Mitsubishi International Corporation. Source: TH Foods, Inc. SIGNIFICANCE OF ABATEMENTS IN THE COMPANY'S DECISION TO RELOCATE/EXPAND The tax incentives being requested are an important factor in the Company's decision to expand their Henderson operations. As a manufacturing business, capital equipment purchases and upgrades are vital to continued successful operation and rapid growth. The potential incentives offered by Nevada are critical for this expansion project. Source: TH Foods, Inc. REQUIREMENTS Statutory Application Sufficient % Over / Under Job Creation Yes 20% Average Wage $21.35 $20.93 No -2% Equipment Capex (SU & MBT) $7,470,590 $23,316,250 Yes 212% Equipment Capex (PP) $7,470,590 $23,316,250 Yes 212% INCENTIVES Requested Terms Estimated $ Amount Sales Tax Abmt. Abated to 2% for 2 years $1,433,949 Modified Business Tax Abmt. 50% for 4 years $40,953 Personal Property Tax Abmt. 50% for 10 years $770,629 Total $2,245,531 JOB CREATION Contracted 24-Month Projection 5-Year Projection OTHER CAPITAL INVESTMENT Land Building Purchase BTS / Building Improvements $0 $0 $0 ECONOMIC IMPACT ESTIMATES (10-Year Cumulative) Total Construction Total Jobs Supported 113 $0 Total Payroll Supported $48,976,077 $0 Total Output Estimate $284,155,653 $0 Estimate includes jobs, payroll & output by the company assisted as well as the secondary impacts to other local businesses. NEW TAX REVENUE ESTIMATES (10-Year Cumulative) Direct Indirect Total Local Taxes Property $1,720,627 $1,500,322 $3,220,949 Sales $0 $877,084 $877,084 Lodging $0 $52,722 $52,722 State Taxes Property $1,720,627 -$1,539,161 $181,466 Sales $466,325 $303,652 $769,977 Modified Business $234,376 $354,720 $589,096 Lodging $0 $1,648 $1,648 Total $4,141,955 $1,550,987 $5,692,942 IMPACT ASSESSMENT Economic Impact per Abated Dollar New Total Tax per Abated Dollar $127 $2.54 EMPLOYEE BENEFITS - Percentage of health insurance plan covered by company: 85%. - Health care package cost per employee - $16,809 annually with options for dependents. - Overtime, PTO/Sick, Merit increases, Tuition assistance, Retirement Plan/Profit sharing / 401(k), Bonus. NOTES - Percentage of market outside of Nevada: 99%. - The company is also considering Arizona and Ohio as potential locations.

3

4

5 4-aF) TH Foods,Inc. September 28,2016 TH Foods, Inc, 2154 Hanem Road Loves Pall(, lt 6t7LI-2753 Ph: Fa)( Mr. Steve Hill Executive Director Governor's Office of Economic Development 808 West Nye Lane Carson City, NV Dear Mr. Hill, By way of this letter and the attached Application, TH Foods, Inc., is requesting the grant, by the State of Nevada, of certain tax incentives to assist with the expansion of our recentiy esta-blished operations in the state. Continued strong growth requires the installation of our foufth production line in our Henderson, NV facility. As provided in the Application, with such an expansion of our operations we anticipate hiring an additional 30 full-time employees at an average wage of g20.93 (excluding benefits). When combined with those employees hired as pat of establishing our new operations in July 2012, pnd 9ul expansions in August 2013 and september 2014, the average wage is (including benefits). Founded in 1984 in RocKord, Illinois, TH Foods manufacturers baked rice crackers and snacks including the crunchmaster brand. our current operations are located in Loves park, Illinois, and Henderson, Nevada. our sales exceed g200 million annually. (A brief history of ori.o;npuny u,ong with an overview of our products is attached.) Our experience with representatives from the Las Vegas Global Economic Alliance continues to be positive and we look forward to your approval of our Application to assist us with our expansion decision making process. If you have any questions, please feel free to call me at g Thank you for your time and consideration.

6 Incentive Application Company Name: TH Foods, Inc. Date of Application: September 27, 2016 Company is an / a: (check one) New location in Nevada Expansion of a Nevada company Section 1 - Type of Incentives Please check all that the company is applying for on this application: Sales & Use Tax Abatement Modified Business Tax Abatement Personal Property Tax Abatement Section 2 - Corporate Information Other: COMPANY NAME (Legal name under which business will be transacted in Nevada) TH Foods, Inc. CORPORATE ADDRESS 2134 Harlem Road MAILING ADDRESS TO RECEIVE DOCUMENTS (If different from above) Sales & Use Tax Deferral Recycling Real Property Tax Abatement CITY / TOWN Loves Park FEDERAL TAX ID # STATE / PROVINCE ZIP IL CITY / TOWN STATE / PROVINCE ZIP TELEPHONE NUMBER (815) COMPANY CONTACT NAME Terry Jessen ADDRESS tjessen@thfoods.com Section 3 - Program Requirements A capital investment of $1,000,000 in eligible equipment in urban areas or $250,000 in eligible equipment in rural areas are required. This criteria is businesses. In cases of expanding businesses, the capital investment must equal at least 20% of the value of the tangible property owned by the business. New businesses locating in urban areas require fifty (50) or more permanent, full-time employees on its payroll by the eighth calendar quarter following quarter in which the abatement becomes effective. In rural areas, the requirement is ten (10) or more. For an expansion, the business must increase employees on its payroll by 10% more than its existing employees prior to expansion, or by 25 (urban) or 6 (rural) employees, whichever is greater. In urban areas, the average hourly wage that will be paid by the business to its new employees is at least 100% of the average statewide hourly wage. in rural areas, the average hourly wage will equal or exceed the lesser of the county-wide average hourly wage or statewide average hourly wage. Section 4 - Nevada Facility Type of Facility: Headquarters Technology Back Office Operations Research & Development / Intellectual Property PERCENT OF COMPANY'S MARKET OUTSIDE OF NEVADA 99% NAICS CODE / SIC PROPOSED / ACTUAL NEVADA FACILITY ADDRESS 160 Gallagher Crest Road WEBSITE COMPANY CONTACT TITLE President & C.O.O. PREFERRED PHONE NUMBER (815) Has your company ever applied and been approved for incentives available by the Governor's Office of Economic Development? If Yes, list the program awarded, date of approval, and status of the accounts (attach separate sheet if necessary): Sales and UseTax. 3/20/14 - Both programs are currently active and remain within compliance. Please check two of the boxes below; the company must meet at least two of the three program requirements: Note: Criteria is different depending on whether the business is in a county whose population is 100,000 or more or a city whose population is 60,000 or more (i.e., urban area), or if the business is in a county whose population is less than 100,000 or a city whose population is less than 60,000 (i.e., rural area). DESCRIPTION OF COMPANY'S NEVADA OPERATIONS Cookie/cracker manufacturing and distribution. Service Provider Distribution / Fulfillment Manufacturing Other: EXPECTED DATE OF NEW / EXPANDED OPERATIONS (MONTH / YEAR) Sep-2017 INDUSTRY TYPE Cookie / Cracker Manufacturing Yes CITY / TOWN COUNTY ZIP Henderson Clark County WHAT OTHER STATES / REGIONS / CITIES ARE BEING CONSIDERED FOR YOUR COMPANY'S RELOCATION / EXPANSION / STARTUP? No 1

7 Section 5 - Complete Forms (see additional tabs at the bottom of this sheet for each form listed below) Check the applicable box when form has been completed. 5 (A) Equipment List 5 (B) Employment Schedule 5 (C) Evaluation of Health Plan Section 6 - Real Estate & Construction (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up - Plans Over the Next Ten Years Expansions - Plans Over the Next 10 Years Part 1. Are you currently/planning on leasing space in Nevada? If No, skip to Part 2. If Yes, continue below: What year(s)? How much space (sq. ft.)? Annual lease cost of space: Do you plan on making building tenant improvements? If No, skip to Part 2. If Yes *, continue below: When to make improvements (month, year)? Part 2. Are you currently/planning on buying an owner occupied facility in Nevada? If No, skip to Part 3. If Yes *, continue below: Purchase date, if buying (month, year): How much space (sq. ft.)? Do you plan on making building improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 3. Are you currently/planning on building a build-to-suit facility in Nevada? If Yes *, continue below: When to break ground, if building (month, year)? Estimated completion date, if building (month, year): How much space (sq. ft.)? Part 1. Are you currently leasing space in Nevada? If No, skip to Part 2. If Yes, continue below: What year(s)? How much space (sq. ft.)? Annual lease cost at current space: Due to expansion, will you lease additional space? If No, skip to Part 3. If Yes, continue below: Expanding at the current facility or a new facility? What year(s)? How much expanded space (sq. ft.)? Annual lease cost of expanded space: Do you plan on making building tenant improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 2. Are you currently operating at an owner occupied building in Nevada? If No, skip to Part 3. If Yes, continue below: How much space (sq. ft.)? Current assessed value of real property? Due to expansion, will you be making building improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 3. Do you plan on building or buying a new facility in Nevada? If Yes *, continue below: Purchase date, if buying (month, year): When to break ground, if building (month, year)? Estimated completion date, if building (month, year): How much space (sq. ft.)? Yes Currently 210,000 $1,300, No No * Please complete Section 7 - Capital Investment for New Operations / Startup. * Please complete Section 7 - Capital Investment for Expansions below. BRIEF DESCRIPTION OF CONSTRUCTION PROJECT AND ITS PROJECTED IMPACT ON THE LOCAL ECONOMY (Attach a separate sheet if necessary): Install food manufacturing equipment requiring 30 new jobs in

8 Section 7 - Capital Investment (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up Expansions How much capital investment is planned? (Breakout below): How much capital investment is planned? (Breakout below): Building Purchase (if buying): $0 Building Purchase (if buying): $0 Building Costs (if building / making improvements): $0 Building Costs (if building / making improvements): $0 Land: $0 Land: $0 Equipment Cost: $0 Equipment Cost: $23,316,250 Total: $0 Total: $23,316,250 Is the equipment purchase for replacement of existing equipment? No Current assessed value of personal property in NV: $37,352,949 (Must attach the most recent assessment from the County Assessor's Office.) Section 8 - Employment (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up How many full-time equivalent (FTE*) employees will be created by the end of the first fourth quarter of new operations?: Average hourly wage of these new employees: Expansions How many full-time equivalent (FTE*) employees will be created by the end of the first fourth quarter of expanded operations?: 30 Average hourly wage of these new employees: $20.93 How many FTE employees prior to expansion?: Average hourly wage of these existing employees: Total number of employees after expansion: 83 $ * FTE represents a permanent employee who works an average of 30 hours per week or more, is eligible for health care coverage, and whose position is a "primary job" as set forth in NAC OTHER COMPENSATION (Check all that apply): Overtime Merit increases Tuition assistance Bonus PTO / Sick / Vacation COLA adjustments Retirement Plan / Profit Sharing / 401(k) Other: BRIEF DESCRIPTION OF ADDITIONAL COMPENSATION PROGRAMS AND ELIGIBILITY REQUIREMENTS (Attach a separate sheet if necessary): Bonuses are paid to employees in a bottom-up fashion versus traditional top-down. Section 9 - Employee Health Insurance Benefit Program Is health insurance for employees and an option for dependents offered?: Package includes (check all that apply): Medical Vision Dental Qualified after (check one): Yes (copy of benefit plan must be attached) STD, LTD, Employee Assistance Program Upon employment Three months after hire date Six months after hire date Other: Health Insurance Costs: Percentage of health insurance coverage by: Cost of health insurance for company (annual amount per employee): $ 16, Company: 85% Health Plan annual out-of-pocket maximum (individual): $ 4, Employee: 15% Other: No 1st of Month after 30 days [SIGNATURE PAGE FOLLOWS] 3

9

10 5(A) Capital Equipment List Company Name: TH Foods, Inc. County: Clark County Section 1 - Capital Equipment List Directions: Please provide an estimated list of the equipment [columns (a) through (c)] which the company intends to purchase over the two-year allowable period. For example, if the effective date of new / expanded operations begins April 1, 2015, the two-year period would be until March 31, Add an additional page if needed. For guidelines on classifying equipment, visit: tax.nv.gov/localgovt/policypub/archivefiles/personal_property_manuals. Attach this form to the Incentives Application. (a) ( b) (c) (d) Equipment Name/Description # of Units Price per Unit Total Cost Dryer 1 $3,200, $3,200, Continuous H/F/F/S standup Pouch & Scale & Related Components 1 $2,000, $2,000, Pallet Racking System & Related Components 1 $2,000, $2,000, Cartoner 1 $900, $900, Aging Conveyor 1 $850, $850, Bagger&Scale System & Related Components 2 $750, $1,500, Case Packer 1 $750, $750, Rotary Oven 1 $700, $700, Food Allergen Containment Panels 1 $625, $625, Palletizer 1 $550, $550, Make-Up Air Unit & Condenser 6 $500, $3,000, Bulk Unloader, Conditioners, and CIP cart 1 $500, $500, Cooker 1 $400, $400, Sheeter 1 $400, $400, Electrical Distribution Gear 1 $400, $400, IT Furniture/Equipment/Components 1 $350, $350, Non-slip, Antibacterial Floor Coating 1 $350, $350, Seasoner & Related Components 1 $300, $300, Metal Detection (x-ray, MD, magnetic) 1 $300, $300, Pressure Swing Adsorption Unit & Related Equipment 2 $150, $300, Warehouse Overhead Lighting 2 $150, $300, Employee Welfare (Locker rooms, break rooms, cubicles, etc.) 1 $150, $150, ton Product Bridge Crane 1 $85, $85, Kneader 1 $85, $85, Scalper Shaker 1 $75, $75, Grading Shaker 1 $75, $75, Weigh Batching & Blending Systems 1 $65, $65, Processing Control Panels 6 $60, $360, Forklift 3 $55, $165, Pre-Moistening Raw Material System 1 $50, $50, Cooker platform 1 $50, $50, Dryer Condensate Pump 1 $45, $45, Tote Unloader & Scale 2 $45, $90, Boom Lift 1 $40, $40, Material Conveyors 5 $40, $200, Checkweigher 3 $40, $120, Smart Infeed Conveyor 1 $35, $35, Kneader Operator Platform 1 $30, $30, Quality Instruments (Vacuum Check, O2 check, Color, etc) 1 $30, $30, Sanitary Equipment and Carts 1 $30, $30, Double-Bag Collator & Related Components 2 $30, $60, Sheeter Dies 6 $27, $165, Pallet Truck 2 $25, $50, Rapid Roll Overhead Processing Doors 3 $25, $75,

11 Product Conveyors Packaging Conveyors Film Roll Lift Manlift/Skylift Seasoner Dust Collection System Forklift Changing Hoist & Crane Portable Equipment Transport/Storage Racks Sheeter Tracker Taper Equipment Hot Water Cleaning Stations Forming Tubes Production Scales Sheeter Cooling Fans Forklift Battery Watering Station Hand Washing Stations Pallet Loader Forklift Battery Charging Stands Eyewash Stations Pallet Jacks Colored Bins & Totes Dryer Lights 25 $20, $500, $20, $500, $20, $40, $20, $60, $15, $15, $10, $10, $10, $60, $7, $7, $7, $30, $7, $52, $7, $84, $6, $26, $5, $35, $5, $5, $5, $15, $3, $9, $3, $12, $2, $11, $ $3, $ $24, $ $12, TOTAL EQUIPMENT COST Is any of this equipment* to be acquired under an operating lease? *Certain lease hold equipment does not qualify for tax abatements Yes $23,316, No 6

12 5(B) Employment Schedule Company Name: TH Foods, Inc. County: Clark Section 1 - Full-Time Equivalent (FTE) Employees Directions: Please provide an estimated list of full time employees [columns (a) through (d)] that will be hired and employed by the company by the end of the first eighth quarter of new / expanded operations. For example, if the effective date of new / expanded operations is April 1, 2015, the date would fall in Q2, The end of the first fourth quarter would be the last day of Q2, 2017 (i.e., June 30, 2017). Attach this form to the Incentives Application. A qualified employee must be employed at the site of a qualified project, scheduled to work an average minimum of 30 per week, if offered coverage under a plan of health insurance provided by his or her employer, is eligible for health care coverage, and whose position of a primary job as set forth in NAC (a) (b) ( c ) (d) (e) (f) New Hire Position Title/Description Number of Average Hourly Average Weekly Annual Wage per Positions Wage Hours Position Total Annual Wages Maintenance Manager 1 $ $95, $95, Maintenance Supervisor 2 $ $85, $170, QA Supervisor 1 $ $70, $70, HR Coordinator 1 $ $45, $45, Maintenance Mechanics 6 $ $56, $336, QA Technician 3 $ $34, $102, Production Operator 15 $ $29, $448, Operator - Material Handler 1 $ $37, $37, TOTAL 30 $20.93 $1,306, Section 2 - Employment Projections Directions: Please estimate full-time job growth in Section 2, complete [columns (b) through (c)]. These estimates are used for state economic impact and net tax revenue analysis that this agency is required to report. The company will not be required to reach these estimated levels of employment. (a) Year 3-Year 4-Year 5-Year (b) Number of FTE(s) Projected (c) Average Hourly Wage (d) Payroll 55 $21.53 $2,463, $22.17 $2,536, $22.84 $2,612,

13

14 City of Henderson Inance Department Bu!iness LiCenje Dl,rision P.O. Box Henderson, Nevad, Business ld: TH FOODS, INC HARLEM RD loves pnrx, tl

15

16 TH FOODS, INC

17 TH FOODS MISSION To be a leading Solution Provider (SP) in the Specialty Snack Market by offering LOHAS products in North America 2 2

18 COMPANY PROFILE NAME: TH Foods, Inc. (formerly Terra Harvest Foods, Inc.; formerly Sesmark Foods, Inc.) ESTABLISHED: January 31, 1984 BUSINESS NATURE: Manufacturer of Snacks & Rice Crackers REGISTERED CAPITAL: U.S. $8,714,758 EMPLOYEES: 320 (as of Aug,2013) OWNERSHIP: Mitsubishi Corp. Group 53.16% (Mitsubishi 46.84% & Mitsubishi Int l Corporation 6.32%) Kameda Seika K.K.(Japan) 46.84% COMPANY OFFICERS: CHAIRMAN & CEO: Toru Mark Tanabe PRESIDENT & COO: Terry Jessen VICE PRESIDENT: Tstsuaki Sam Murai FOUNDER & DIRECTOR CORPORATE PLANNING: Glenn C. Smith 3 3

19 HISTORY OF TH FOODS 1984: Started operation in July to produce snacks 1987: Started production of Sesame Thins 1989: Mitsubishi & Kameda joined Sesmark 1991: Started production of Rice Thins 1994: Installed new oven and started production of "Usuyaki" and "Corn & Rice Cracker" 1995: Consolidation & expansion to new facility in U.S.A. 1996: Expansion of the 2nd Rice Production Line 1997: Mitsubishi Group became majority shareholder 1998: Expansion of the 3rd Rice Cracker Production Line Discontinuance of Sesame Thins operation, Sale of Deli Thins brand 1999: Expansion of the 4th Rice Cracker Production Line 2000: Expansion of the 5th Rice Production Line. Expansion of 3rd fryer 2001: Established a manufacturing plant in Australia, Terra Harvest Australia Pty. Ltd. 2002: Changed company name to Terra Harvest Foods, Inc. Established our Mr. Krispers Brand of Gourmet Rice Chips 2004: Sold Terra Harvest Australia Pty. Ltd. Changed company name from Terra Harvest Foods, Inc. to TH Foods, Inc. (THF) Mid-Term Plan, SGC 50-5 ( ) started. 2005: Acquired Crunch Master Business and Snack Facility from UPI. Consultant Agreement with Ming Tsai. 2006: Expansion of the 6th Rice Production Line. Expansion of 4th Fryer Expansion of Warehouse 2007: Launch of Crunchmaster Multigrain Club Pack 2008: Expansion of the 7 th Rice Production Line 2009: Launch of Crunchmaster Mulit-Seed Crackers for retail 2010: Relocation of corporate office facilities 2011: Expansion of the 8 th Rice Production Line 2012: Established Second Plant In Henderson (Nevada) and installed the 9 th Rice Production Line. 2013: Expansion of the 10 th Rice Production Line for Henderson. 2014: Relocation of Snack Plant in Machesney Park(Illinois) and install 5 th Fryer Line. 4 4

20 Product & Packaging Capabilities Building - 205,000 Square Feet (Loves Park, IL) - 150,700 Square Feet (Henderson, NV) Production Line - 6 Rice Line & 4 Fried Line (Loves Park, IL) - 2 Rice Line (Henderson, NV) Packaging Bag (poly/foil) Standup, Resealable Pouches Bag in Box Tray Pack (poly/foil wrapped) Product Fried Bulk Snacks: Sesame Sticks, Corn Sticks, Oat Bran Sticks, Pasta Shapes, etc. Baked Usuyaki Rice-Based Technology: Crackers (Regular & Mini) Chips Shapes (i.e., tortilla, hexagon, square, wave) Rice Blends: potato, corn, sorghum, etc. Inclusions: seeds (i.e, sesame, flax, quinoa, chia), nut meals, sweet corn, beans, etc. Topical Seasoning: dry & slurry applications 5 5

21 Quality Program Certified Superior by AIB SQF Level Ⅲ(IL/NV) Certification (as of June,2013) Conduct Periodic Safety Audits Quality Assurance Periodic testing during production to ensure quality of products GMP s in place Translated into Spanish & English Annual training of GMP s for all employees HAACP program in place Metal detection in process, and finished package 6 6

22 Consideration of Dietary Needs When Purchasing Snack/Cracker Products (Q.3a - % primary grocer shopper indicating what dietary needs they consider when purchasing snacks/crackers) Weight Loss Weight Maintenance Heart Health High Cholesterol 29% 29% 28% 28% Weight and heart related conditions are the primary concerns of consumers when purchasing snack & cracker products High Blood Pressure Sodium Restricted 22% 24% Diabetes 13% Lactose Intolerant Vegetarian/ Vegan Diet 8% 7% Celiac/ Gluten Intolerant Wheat Allergy Tree Nut Allergy 2% 1% 3% Sesame Allergy 0% Source: Natural Marketing Institute Concept Test, December

23 Important Characteristics of Snack/Cracker Products (Q.3b - % LOHAS snack/cracker users indicating the following are extremely/very important when deciding to purchase snack products) Savory taste Calories per serving Whole Grain Has high fiber All Natural Low Fat Baked, not fried Multi-grain Low Sodium Has crunchy/crispy texture Low Sugar Cholesterol Free Contains vegetables Contains Omega 3 fatty acids Sweet Taste Organic Certified GMO free Contains whole seeds Contains brown rice Certified gluten free Wheat free 9% 20% 17% 30% 27% 24% 54% 52% 50% 50% 46% 43% 43% 38% 8 60% 60% 57% 55% 55% 54% 77% Source: Natural Marketing Institute Concept Test, December

24 Healthy Audiences Whole Grain/Low Saturated Fat/Cholesterol Free - Appeals to Heart Healthy Consumers % of population Oven Baked = Lower Fat - Appeals to Weight Conscious - 30% of population Certified Gluten Free - Appeals to Gluten Free dieters % of population Sugar Free/Good Source of Fiber - Appeals to Diabetics - 14% of population & growing rapidly 9 9

25 Crunchmaster Multi-Seed Crackers 100% Whole Grain (19g per serving) Certified Gluten Free (by the GFCO) Blend of California Brown Rice & 4 Seeds (Sesame, Quinoa, Amaranth & Flax) Low Sugar (original is sugar free) All Natural Low Saturated Fat Low Sodium Oven Baked Trans Fat Free Cholesterol Free 10 10

26 Crunchmaster Multi-Grain Crackers Features/Claims: 100% Whole Grain (22g per serving) Low Fat (50% less than the leading fried multi-grain chips) Saturated Fat Free 0g Trans Fat Cholesterol Free Low Sodium Good Source of Dietary Fiber All Natural Short, Clean Ingredient Deck Wheat Free Certified Gluten Free It s a Cracker Or a Healthy Chip! 11 11

27 Status: New Items Rollout in Walmart (2,500 stores) 9/17 Retail Rollout: Cheezy/Grammy Crisps Store Acceptances: Wegman s, HEB, etc. Distributors: Kehe, Lipari, UNFI 12 12

28 Display your Crunchmaster Bags Conveniently on Spinner/Clip Racks! Displayed: 18 Octagon Base - 60 Clip Assembly (6 vertical rows with 10 clips each) Holds 5 cases of product 72 tall with header card Weight: 11lbs without product Easy Assembly!! 13

29 Deli Snacks Wire Display Rack Features: - 5 Wire Basket Design with Crunchmaster Logo on Each - Solid Black Tubular Supports - No Assembly Required! - Each Basket Holds 12 Multi-Seed or 9 Multi- Grain Cracker Pouches - Space (10 ) Under for Ease in Floor Cleaning - Wire Clip on the Top Support for Optional Header Card (Seasonal) Dimensions: 24 Width X 56.5 Height Depth: Baskets 9, Stand

30 Recommended Shelf Set 15

31 Display Shipper Options 16

32 17 17

33 Thank You 18 18