Books & Brews mission is to provide a place for people without a place. Where all are accepted, appreciated, and encouraged to be themselves. We sell craft beer, focus on local food, and provide an extensive social-based event schedule but we are defined by our people. Simply put, people are our product.

1508206846 headshot
Evan Sandullo, CEO

Financial Summary

Previous Fundraise Summary

Security Type Revenue Share
Minimum Investment $1,000
Equivalent Interest Rate (/yr) 13.00%
Payback Multiple 1.25x
Payment Frequency Monthly
Disbursement Late Fees 5.00%
Loan Collateral Unsecured
Seniority Junior
Maturity June 30, 2021
Investor Eligibility All Investors

Offering Materials

There are no offering materials available for this business. Check back soon.
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Investment Perks

Expired 06/11/2018 | $10,000.00
Exclusive Investor Discounts

40% off all B&B merchandise and a $40 monthly credit. (Broad Ripple and University of Indianapolis locations only) Custom plaque, with your name, to be displayed at either U Indy or Broad Ripple location on a table or chair back and a B&B zip up hoodie.

Expired 06/11/2018 | $5,000.00
Exclusive Investor Discounts

30% off all B&B merchandise and a $25 monthly credit. (Broadripple and University of Indianapolis locations only)

Financials

This is an overview of the previous and planned financings of the business, including the capital needs the business is looking to cover in the current financing.

Funding Uses for Target Raise ($115 k)

Equipment Purchase
$65,000
Description This will cover furniture, fixtures, and small wares as well as kitchen / bar equipment for both the U of I and Broad Ripple locations.
Timing 3 monthly payments beginning when investments close.
Other
$35,000
Description Working capital
Timing A one-time payment when investments close.

Funding Uses for Max Raise ($160 k)

In addition to target raise

Location/Buildout
$50,000
Description This money will aid in the build out not covered by the TI money.
Timing 2 monthly payments beginning when investments close.

Remaining funding uses include cash buffer and Localstake Marketplace fees. See offering materials for full details.

Q&A

How do you market your product or service?

We focus mainly on word of mouth and social media. There is no better advertising than a positive experience, so first and foremost we want to ensure our customer service standards are being met. Second, we want to stretch our advertising dollar as far as possible while making sure each dollar is well spent and hitting a demographic that will enjoy the B&B experience. In order to accomplish this, we mainly rely on targeted marketing on Facebook which can advertise to very specific interests. 

The Books and Brews corporate Facebook page has over 15,000 likes and followers and a 4.8 star rating from over 270 reviews. They also have over 4,000 followers and 3,000 likes on Twitter.

What press have you generated recently?
Books and Brews and associated franchises have been covered in a number of Indianapolis-area publications in recent months.
Provide us with some background on your products and services.
Our main revenue streams are beer (and other alcoholic beverages), food, merchandise, and books. We use as many local products as possible in both our beer production and food menu.

Staple Brews
Brew Cans

Our Beers

Our beer menu consists of between five to seven house beers and an equal amount of guest taps. We focus on keeping a range of flavor profiles to make sure we have one beer on tap (both house and guest) in each of the following categories: hop-forward, malt-forward, wheat/fruit, stout/porter, and blonde/cream. We sell our beer on draft by the 16-ounce pint, 10-ounce pour, 64-ounce growler, and 32-ounce bullet. We take advantage of our small batch size and experiment frequently with odd and off-the-wall flavors. We debut a new, one-off, or seasonal beer every Friday in order to drive at the "hobbyist" customer always looking to try something new and exciting.

Mug Club

Mug Club

Our lifetime Mug Club membership is a lifelong membership program that gives members a long list of perks. To date, we have over 1,100 mug club members between our Indianapolis and Zionsville location and we expect that number to sky rocket as we add both franchised and company-owned stores (memberships will be transferable between all stores).

Merchandise

Our merchandise options include several company designs in addition to products by Out of Print Clothing. Out of Print Clothing is an organization out of New York that licenses covert art from classic novels and puts them on t-shirts, sweatshirts, tote bags, and more. We also see a lot of sales from glassware.

Book Exchange

Books

Finally, our books make up a small sliver of our sales. We get all our books on donation from our customers and sell them for $3. We also use the books as an added perk for mug club members with a lifetime book exchange policy - leave a book, take a book. We donate 10% of the proceeds from the book sales to Indy Reads, a non-profit that focuses on adult and family literacy. 

What is your product development timeline?

Primary product development initiatives will revolve around menu changes to provide the university with expanded offerings.  We will work with B&B corporate on new revenue opportunities that deepen the partnership with U of I.

Who are your target customers?
Customers

We don't target specific demographics but provide an atmosphere that attracts specific interests and social-based activities and/or groups. For example, book clubs, writers, musicians, gamers, craft beer enthusiasts, foodies, or anyone looking to disconnect from technology and have a conversation.  

Do you have current customers?

While the two locations contemplated in this offering are not yet operational, here is a selection of what people are saying about the Books & Brews concept at existing locations.*

Books and Brews is my favorite place in town. We've been lucky enough to watch it grow from a tiny start-up to a formidable opponent in the craft beer market. The staff is the best. The customers are the best. There is some sort of event every day of the week, whether it's trivia, Magic gaming, or open mic. #mugclub4life! - Kristie K., Indianapolis, IN
The coolest most quirky atmosphere! Great price for value and the beer- omg the beer was amazing with so many different varieties of styles and flavors, all with literary theme names. The lovely ladies behind the bar were attentive without being overbearing and played great tunes! Will absolutely be back! - Haley H., Mission, KS
The concept of this place is amazing -- a used bookstore and micro-brewery, in the same place?  How cool is that?  It's a nice, chill place to socialize with friends... - Alida R., Indianapolis, IN
I cannot say enough good things about this place! Every beer that I've tried has been delicious and their beer cheese is also tasty. The employees are super knowledgeable and friendly, and are eager to tell you more about the beer. So good!  Love the atmosphere and vibe of this place, too. It's just so creative! Probably..wait not probably..it is..my favorite brewery in Indy. - Meredith S., Indianapolis, IN

*These testimonials may not be representative of the experience of other customers.

What is your competitive advantage?

We appeal to nostalgia. Our business model will never die because nostalgia will never die. People will always appreciate the concept and history of paper books the same way they will always appreciate antiques. All of our house-made beers and food menu items are themed after authors, books, or literary themes.

We also appeal to everyone's sense of authenticity. We live in a time where the average customer is more informed about the world around then they ever have. Simply put, they can spot a fake. After going through the 80s, 90s, and 00s where the focus was "bigger, faster, cheaper," the market is now demanding "small batch, authentic, local." We will ensure the longevity of this appeal by committing to always keeping our local vendors, locally-made ceramic mugs, and hand-built furniture in all our locations.

Who are your competitors?

We believe we have aligned ourselves with several industries without becoming direct competitors including breweries, gaming stores, live music venues, event space, co-working space, etc. For example, most breweries are product-based businesses where that would have no business if they ran out of beer. Since we are an experience-based business we can afford to deal with product-based difficulties that arise (we can continue to operate and be profitable if our brew system breaks down, for example).

In the future, there is always the possibility someone will try to copy our bookstore/bar theme. However, we don't believe the big money restaurant investor will be able to duplicate our experience or go to lengths to compete with our small batch brewhouse, locally-sourced menu, or hand-built furniture.

What market(s) are you in?

Books and Brews operates in the tap room and limited service restaurant business primarily in the Indianapolis area.  Based on some industry statistics, the craft beer segment is one of the fastest growing in the beer production industry.  The two locations we will operate provide us with some unique opportunities.  The Shelby location, near the University of Indianapolis, offers us a virtually untapped market.  There are several fast food restaurants in the area, but nothing that provides the laid back atmospshere as B&B.  

Our Broad Ripple location is in a more competitive environment, however, we feel that B&B provides a unique value proposition versus the other food / bar establishments in the surrounding area.  The location we are finalizing puts us just across from the Monon trail where significant foot traffic will provide a consistent flow of potential customers.  

Where will the franchise locations be located?
We will be operating two Books and Brews franchise locations. These will be the 7th and 8th Books and Brews locations in the Indianapolis area.

University of Indianapolis location

UofI Map
Welcome Sign
UofI Building

The University and has entered into an agreement with Books & Brews to develop the property, with construction beginning in October. The opening aligns with the University’s long-term commitment to grow the area in partnership with the surrounding community and to expand retail options for students and residents. Books & Brews has a lease actively in place for the property. This is an old bowling alley that will be split.  This will include 4,600 sq. ft. of space to include a stage, bar, and tap area.  Books & Brews is receiving $180k in TI allowance for the buildout of this property.

Broadripple location

UofI Map
Welcome Sign
UofI Building

Books & Brews is targeting the old Monon Food Company location which recently closed in the thriving Broadripple neighborhood. Books & Brews has a lease agreement in place for this property. This location has both indoor and outdoor seating.

Provide detail on your hiring plans

Books & Brews operates with a lean and cost efficient labor profile.  The location near the University will have the following structure:

Daily Employee Structure - University of Indianapolis Location
Day ShiftMTWTFSS
BL1111114
SL1111111
KP111----
KL---1111
Total Staffing3333336
Night ShiftMTWTFSS
BL222444-
SL111111-
KP111111-
KL-------
Total Staffing444666-

Our Broadripple location will have the following model:

Daily Employee Structure - Broadripple Location
Day ShiftMTWTFSS
BL1111111
SL------1
KP111----
KL---1111
Total Staffing2222223
Night ShiftMTWTFSS
BL111222-
SL111111-
KP111----
KL---111-
Total Staffing333444-

We would anticipate needing maintain 10 - 15 employees on staff to fill the various day to day needs.  We will have one GM position at each facility to provide the on site day to day management.

Team

1508206846 headshot

Evan Sandullo

CEO

Evan graduated in 2001 from Evansville University with a degree in finance. He also has his MBA and CMA certification. He has spent the last 15 years of his career in manufacturing finance primarily in financial controller roles. Recently, Evan has transitioned into the plant manager role for his current company.

Evan and his wife have 3 kids and enjoy a variety of activities in their spare time.

As the CEO, Evan will focus his time on the financial management and general oversight of the businesses while helping to expand the B&B brand to the communities served.

1510001958 melissa20170611 22 %281%29

Melissa Sandullo

COO

Melissa is a singer/songwriter who performs professionally throughout the greater Indianapolis area. She has over twenty years' experience as a professional musician as well as an Associate and Bachelor degree in music performance. She also has sales and marketing experience. Melissa is passionate about providing a space for students and members of the University Heights and Carson Heights communities to showcase their creative abilities. She will handle the majority of day to day operations and will be instrumental in working with the University on partnerships around their arts programs. She will focus on public relations, marketing, and the live music, performing, and visual arts offerings of our establishment.

1509739525 andrew teed photo

Andrew Teed

Andy will operate in an advisory capacity for the two locations providing support with strategy, financial management, and market opportunities.

• 1990 Western High School Grad (Howard County); 1994 IU Grad

• Arthur Andersen 1994-2000, Audit Manager. I spent my last year with the firm in Silicon Valley before accepting the Controller position with a client named OptCom. It was a telecom manufacturing company in California that didn't survive the shakeout following the .com bubble. It was one of the best learning experiences in my career.

• Following OptCom, my wife and I moved back to Indiana and I began working for Tyler Technologies (NYSE: TYL), which is today the largest public software company dedicated exclusively to state and local government. We have over 15,000 deployments in all 50 states and abroad, including the court system utilized by the State of Indiana and the financial system utilized by IPS. I began running one of our 4 business units in 2005, overseeing all functions including sales, marketing, hr, accounting, r&d, development, implementation, and support. Today, we have 5 business units and 4,000 people. I run 3 of the business units including dozens of verticals and 2,500 staff.

• I've wanted to invest in Indiana for some time and an opportunity to purchase Flat12 Bierwerks arose. I was asked to join their board initially. I resigned within 30 days and made an offer to purchase it's assets. The transaction closed in September 2017, and our turnaround is effectively complete. I carry no leverage on the company and hold all the stock other than unvested options I've granted at minority %'s.

• Through Flat12, I've gotten to know local businessman and owner of Books&Brews, Jason Wuerfel, and have been impressed with him and his company. He introduced me to the Sandullos who I also think highly of. This is a successful brand and the location opportunities are strong. I'm looking forward to working with this team and helping to create another Books&Brews success story.

• My wife and I have 4 great kids, 2 at Chatard and 2 at IHM. Carmen and I love the city and look forward to giving back in the decades to come.

1509207772 flat 12 bierwerks logo

Flat12 Bierwerks

Service Provider

Books and Brews Franchising has also entered into an agreement with Flat12 Bierwerks to help it meet brewing production needs for new franchisees. Flat12 was formed in 2010 just east of downtown Indianapolis in the Holy Cross neighborhood. Their sustainable success is attributable to their passion for offering high-quality, unique, and enjoyable beers for all pallets. The ingenuity of the Flathead 12-cylinder engine revolutionized racing in the great state of Indiana.

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About Books & Brews (Franchise)

Entity ESTERCUVÉE, LLC
Entity Type LLC
State Organized Indiana
Founded August 2017
Employees 2
Website

Headquarters

Company Updates

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Risks & Disclosures

Limited operating history

The Company was formed in August 2017 and has no operating history upon which to evaluate its business and has generated no revenues to date. Although management of the Company currently anticipates that its business strategy will be successful, the Company may not be able to achieve the revenue growth in the coming years necessary to achieve profitability. The Company's prospects also must be considered in light of the risks and difficulties frequently encountered by early-stage companies in today's business environment. The Company may not be successful in addressing these risks, and the business strategy may not be successful.

Unpredictability of future revenues; Potential fluctuation in operating results

Because the Company has limited operating history, the ability to forecast revenues is limited. The Company's future financial performance and operating results may vary significantly from projected amounts and fluctuate substantially from quarter to quarter due to a number of factors, many of which are likely to be outside of the Company's control. These factors, each of which could adversely affect results of operations and future valuation, include:

  • demand for the Company's products and services;
  • introduction or enhancement of products and services by the Company and its competitors;
  • actual capital expenditures required to bring the Company's services and platform to market;
  • market acceptance of new products and services of the Company and its competitors;
  • price reductions by the Company or its competitors or changes in how products and services are priced;
  • the Company's ability to attract, train and retain qualified personnel;
  • the amount and timing of operating costs and capital expenditures related to the development and expansion of the Company's business, operations and infrastructure;
  • unexpected costs and delays relating to the expansion of operations;
  • change in federal or state laws and regulations;
  • timing and number of strategic relationships that are established;
  • loss of key business partners; and
  • fluctuations in general economic conditions.

The projections of the Company's future operating costs are based upon assumptions as to future events and conditions, which the Company believes to be reasonable, but which are inherently uncertain and unpredictable. The Company's assumptions may prove to be incomplete or incorrect, and unanticipated events and circumstances may occur. Due to these uncertainties and the other risks outlined herein, the actual results of the Company's future operations can be expected to be different from those projected, and such differences may have a material adverse effect on the Company's prospects, business or financial condition. Any projections that were prepared or provided by the Company were not prepared with a view toward public disclosure or complying with the published guidelines of the American Institute of Certified Public Accountants or the Securities Exchange Commission regarding projected financial information. Under no circumstances should such information be construed to represent or predict that the Company is likely to achieve any particular results.

Reliance on key management employees and future personnel

The success of the Company is dependent on the efforts of a limited number of key people. The Company has not made plans to purchase key person life insurance. The loss of key personnel could have a serious adverse effect on the Company's prospects, business, operating results, and financial condition. To fulfill its operating plans, the Company's future success also depends on its ability to identify, attract, hire, train, retain and motivate other highly skilled technical, managerial, marketing, sales and customer service personnel. Competition for such personnel is intense and there can be no assurance that the Company can attract, assimilate or retain sufficiently qualified personnel. The failure to attract and retain the necessary personnel could materially and adversely affect the Company's business, prospects, financial condition and results of operations.

The Company's management will have broad discretion in use of proceeds

The Company has preliminarily designated the use of the proceeds from this Offering for location buildout, equipment purchases, general working capital purposes and other necessary expenditures as determined in the discretion of management. Accordingly, the Company's management will have significant flexibility and broad discretion in applying the proceeds of the Offering. The failure of management to apply these funds effectively could have a material adverse effect on the Company's business, results of operations, prospects, and financial condition.

No assurances of sufficient financing; Additional capital may be required

Although the Company believes the proceeds of this Offering will provide adequate funding to develop and successfully support its business plans, there can be no assurances that such funds will be adequate.  The Company may have additional capital needs that are not addressed by the proceeds of this offering. There can be no assurance that adequate additional financing on acceptable terms will be available if and when needed.

Competition from other businesses

The Company will compete in a competitive market with several established breweries and brewpubs including Sun King Brewing, Daredevil Brewing, Triton Brewing and many others. The Company expects competition to increase in the future. If and when the Company expands the scope of its product and service offerings, it may compete with a greater number of companies across a wider range of products and services. Many of the Company's current competitors and potential new competitors may have longer operating histories, greater name recognition, larger client bases and significantly greater financial, technical and marketing resources than the Company. These advantages may allow them to respond more quickly to new or emerging technologies, changes in laws or regulations, and changes in customer requirements. There can be no assurance that the Company will be able to compete successfully in its chosen markets and competitive pressures may materially and adversely affect the Company's business, prospects, financial condition and results of operations. Any significant success of the Company's competitors can damage relationships with its customers and service providers, diminish the Company's market share, and present significant obstacles to the further development of the Company.

Existing and potential litigation

Although management is unaware of any threatened or pending litigation against the Company or management, there can be no assurance that future claims will not be asserted and that, even if without merit, the cost to defend against such claims would not be significant, thus having a material adverse effect on the Company's business, financial condition and results of operations. The Company has never filed any lawsuit against any other person or entity, or been the subject of a lawsuit.

Need to establish new and maintain existing customer relationships

The Company is unable to predict whether its products and services will continue to satisfy new and existing customer demands or if it will be supplanted by new products and services. To date, the Company has developed no customer relationships. The Company's efforts to market and sell its services could be significantly affected by competitive developments. If this occurs and if the Company is unable to adapt quickly enough to the change, it may fail to develop customer relationships, and maintain those relationships, and its business, financial condition and results of operations could be materially adversely affected.

Need to maintain existing, and develop new products and services

The success of the Company is dependent upon the Company's ability to maintain a certain level of quality in, and enhance existing products and services as well as to develop and introduce in a timely manner new products and services that keep pace with evolving industry standards, and respond to changing customer requirements. If the Company is unable to develop and introduce new products and services or enhancements in a timely manner in response to changing market conditions or customer requirements, while maintaining a certain level of quality in its existing products and services, the Company's business, financial condition and results of operations would be materially adversely affected.

Control of the Company

The Company’s management will have sole management authority over the business of the Company, regardless of the opposition of investors to pursue an alternate course of action. Investors will have no right to vote with respect to management or to participate in any decision regarding management of the Company’s business.

The Company is obligated to indemnify its management

Executive officers and managers of the Company owe certain duties to the Company they serve in connection with the use of its assets. Executive officers and managers are fiduciaries, and as such are under obligations of trust and confidence to the Company and owners to act in good faith and for the interest of the Company and its owners, with due care and diligence. Notwithstanding the foregoing, the Company is obligated to indemnify officers of the Company for actions or omissions to act by such officers of the Company on behalf of the Company that are authorized under the organizational documents of the Company. In addition, an officer may be entitled to advancement of expenses they may incur associated with or in defense of charges, claims or legal action arising from such person’s position as an officer or manager of the Company, which could result in a decrease in the assets available for investors in certain circumstances. The assets of the Company will be available to satisfy these indemnification obligations. Such obligations will survive dissolution of the Company. There are very limited circumstances under which the management of the Company can be held liable to the Company. Accordingly, it may be very difficult for the Company or any investor to pursue any form of action against the management of the Company.

Limited ability to protect intellectual property rights

The Company will rely on intellectual property laws, all of which offer only limited protection. Competitors may infringe upon any patents or trademarks that the Company takes out. Failure to adequately protect its intellectual property from current competitors or new entrants to the market could have a material adverse effect on the Company's business, operating results, and financial condition. If the Company resorts to legal proceedings to enforce the Company's intellectual property rights, the proceedings could be burdensome and expensive and could involve a high degree of risk.

New geographical market

The new franchise locations are to be opened in the Indianapolis area. Although, the Company’s franchisor has operated similar locations in geographical markets that have similar characteristics to this new market, these will be the first locations to operate in this specific market. There can be no assurances that these locations will respond to the product offering provided by the Company in the way that the Company has experienced in its other markets. Revenue and operating projections are based on the franchisor's experience in other, similar markets. There can be no assurance that actual results will reflect past experience in other markets.

Reliance on the reputation of the franchisor

The Company operates as a franchisee and depends in large part on the success and reputation of the brand “books&brews” as well as the reputation of, and decisions by, corporate management and other franchisees. The Company’s reputation may be harmed by actions taken by third parties that are outside the control of the Company.

Regulatory and other industry changes may adversely affect the Company

The Company operates in a highly regulated industry as a craft brewery. In order to operate the Company, must maintain various state and federal licensees to permit the production and retailing activities contemplated by the business model. The Company has not yet secured the regulatory permits and licenses necessary to begin brewing operations and commence retail sales.  The Company expects to have all necessary licenses and permits in place in the coming months, however there is no guarantee they will be successful in doing so.  If the Company is unable to secure the necessary licenses and permits its financial and operational results may be adversely affected. In addition, the violation of these or future requirements or laws and regulations could result in administrative, civil, or criminal sanctions against us, which may include fines, a cease and desist order against the subject operations or even revocation or suspension of the Company’s license to operate the subject business.

Reliance on third parties for product inputs

The Company will rely on various third parties to provide its product inputs and other goods and services. These third parties may become unable to or refuse to continue to provide these goods and services on commercially reasonable terms consistent with the Company’s business practices, or otherwise discontinue a service important for the Company to continue to operate under normal conditions. If the Company fails to replace these goods and services in a timely manner or on commercially reasonable terms, the operating results and financial condition of the Company could be harmed. In addition, the Company exercises limited control over third-party vendors, which increases vulnerability to problems with goods and services those vendors provide. If the goods and services of the third parties were to fail to perform as expected, it could subject the Company to potential liability, adversely affect renewal rates, and have an adverse effect on our financial condition and results of operations.

No audited financial statements

The Company has not yet sought to have its financial information audited by an independent certified public accountant and there is no assurance that it will do so in the future. All financial information provided in the Offering Materials have been prepared by the Company's management team and have not been reviewed or compiled by an independent accounting firm.

Provision of services by management and their affiliates

Management will be contracted by the Company to render services for the Company at multiple locations, which may result in conflicts between the Company and the entity retained to perform such services. Management may have conflicts in allocating time, services and functions of management and staff between and among the Company at the various locations in which they are members and other business ventures in which they are involved. Management believe that they are fully capable of discharging such responsibilities.

The Revenue Share Series I are offered on a best efforts basis

The Securities are being offered by the Company on a best efforts basis as specified herein. The Company will begin using the net proceeds of the Offering immediately. To the extent that the Company does not raise the full amount that it is seeking in this Offering, some or all of the business objectives and financial forecasts of the Company may be delayed and/or unfilled. There can be no assurances that the Company will raise the full amount sought through this Offering.

No market; Lack of liquidity

There currently is no public or other trading market for the Securities being offered or any other securities of the Company and there can be no assurance that any market may ever exist for the Securities being offered or any other securities of the Company. If a public market does develop, factors such as competitors' announcements about performance, failure to meet securities analysts' expectations, changes in laws, government regulatory action, and market conditions for the industry in which the Company operates in general could harm the price of the Company's publicly traded securities. The Securities being offered will be restricted securities under the Securities Act and applicable state securities laws and, as such, may not be transferred, sold, or otherwise disposed of, except as permitted under the Securities Act and state securities laws, pursuant to registration or exemption from registration. The Company has no obligation to register the Securities being offered or any other securities under the Securities Act or any state securities laws. Prospective investors should be prepared to hold their Securities for an indefinite period.

Restrictions on transferability

The Securities being offered by the Company have not been registered under federal or state securities laws, and are being offered pursuant to available exemptions thereunder. As a result, the Securities being offered are subject to restrictions on transferability and resale and may not be transferred, sold, or otherwise disposed of, except as permitted under the terms of the Securities and applicable federal and state securities laws. In addition, there is no market for the Securities being offered and the Company does not expect that any market will be developed in the foreseeable future.

Investors may not receive a return of their investment amounts and there is no guarantee of return

Investors will be entitled to receive a return on their investment only through the RSAs and the monthly revenue share payments thereunder. The only source of funds for the repayment of the investors' investment amounts and a return on such investment amounts is the Company's operations. The return to investors and the future value of the investment will depend on a number of factors which cannot be predicted at this time and which may be beyond the control of the Company. These include the general, local, and industry-related economic conditions. In the event that the Company does not generate sufficient revenues from operations, the investors may not receive any return at all and may lose a substantial portion (or possibly all) of their investment amounts. Neither the Company nor Localstake makes any representations or warranties with respect to any return on an investment in the Company. There can be no assurance that an investor will receive any return on an investment in the Company or realize any profits on such prospective investor's investment in the Company.

Investors will not become members of the Company

Investors will not become members of the Company and shall have no voting, dividend, or other rights or status as a member of the Company as a result of his, her or its investment. Investors shall only be entitled to their pro rata share of collected gross revenue of the Company, up to the Maximum Revenue Share Amount. The only return on the investment is the monthly revenue share payments set forth in the RSAs.

The obligations of the Company under the Revenue Share Series I will be unsecured obligations

The Company's obligations under the RSAs will be unsecured obligations. Therefore, upon the occurrence of an event of default under RSAs, an investor will have no recourse against the assets of the Company and rights that the investor may have under the RSAs will be subordinate and inferior to the Company's other creditors, if any.

The RSAs will be treated as debt for federal income tax purposes

The Company intends to treat RSAs as debt for federal tax purposes. No clear guidance exists that definitively provides that an RSA is either debt or equity for federal tax purposes; and thus, a risk exists that the Internal Revenue Service could successfully assert that RSAs should be treated as equity instead of debt. Such a determination is dependent upon all attendant facts and circumstances surrounding the issuance and holding of an RSA, including, but not limited to the following:

  • the presence or absence of an unconditional promise to pay a sum certain at a fixed maturity date; • the right to enforce payment of principal and interest;
  • the status of the contribution in relation to regular corporate creditors (whether or not subordinate to general creditors);
  • the intent of the parties, especially as to non-tax purposes • the names given to the certificates evidencing the indebtedness;
  • the source of payments;
  • participation in management flowing as a result;
  • thin or adequate capitalization;
  • identity of interest between creditor and stockholder;
  • source of interest payments;
  • the ability of the entity to obtain loans from outside lending institutions;
  • the extent to which the advance was used to acquire capital assets or to meet current operating expenses; and
  • the failure of the debtor to repay on the due date or to seek a postponement, as well as the actual payment of the interest.

If the IRS were to prevail that RSAs should be treated as equity for tax purposes, each holder would be considered to be a member of the Company and, because the Company is taxed as a partnership interest payments received by a holder would be recharacterized as distributions from a partnership, which would impact the tax treatment of the holder. Because a partnership generally is not a taxable entity, it will incur no federal income tax liability. Rather, each holder would be required to take into account in computing its federal income tax liability its allocable share of income, gains, losses, deductions, and credits of the Company, regardless of whether cash distributions are made.

Investors will recognize interest income on the Revenue Share Series I each year even if no payments are actually received

Holders of an RSA, regardless of whether the holder reports income under the cash or accrual method of accounting, will be required to recognize interest income from an RSA each year under the original issue discount ("OID") rules contained in the Code, even if no payments are made with respect to the RSAs (so called "phantom income"). Because both the amount of each payment and the timing of the payments to holders of the RSAs are contingent on the Company's ability to generate revenue, a fixed payment schedule cannot be established. Consequently, the Company is required to use the "noncontingent bond method" contained in the Treasury Regulations to determine annual interest and principal payments to the holders of RSAs. In general, under the noncontingent bond method the Company must first determine the yield at which a debt instrument with terms and conditions similar to an RSA could be issued by the Company (the "comparable yield") and prepare a projected payment schedule for the RSA which reasonably reflects the relative expected timing and amounts of the payments to be received by a holder of an RSA. Accruals of interest are then attributed to each day included in the projected payment schedule. If no payments are made during the year, the amount of interest reported to the holder would be equal to the amounts accrued as interest based on the project payment schedule. If payments are made during the year, the actual interest reported with respect to the RSA is determined by adjusting the amounts derived from the projected payment schedule for any differences between the actual payments made and the projected payment schedule. A positive adjustment occurs when the actual amount paid exceeds the projected amount, while a negative adjustment occurs when the actual amount paid is less than the projected amount. All adjustments are netted for the tax year. A net positive adjustment is treated as additional interest for the year. A net negative adjustment first reduces the interest accrued on the RSA for the current year, then is treated as an ordinary loss to the extent of interest previously accrued on the RSA, and any excess adjustment is carried forward to future years. If any net negative adjustment remains at the time of a sale or retirement of the RSA, it is treated as a reduction in the proceeds received. A risk exists that the IRS could dispute these determinations which could impact the amount, character and timing of the payments reported by the Company to the holder of an RSA.

No analysis has been done of potential state or local tax consequences

Prospective investors should consider potential state and local tax consequences of an investment in the Securities and they are urged to consult their own tax advisor to determine the state and local income tax consequences of investing in the Securities. The Offering Materials make no attempt to summarize the state and local tax consequences to potential investors.

Gain or loss on disposition of the Revenue Share Series I

If an RSA is sold, the selling holder will recognize gain or loss equal to the difference between the amount realized from the sale and the selling holder's adjusted basis in the RSA. The adjusted basis generally will equal the cost of the RSA paid by the seller, increased by any OID on the RSA included in the seller's income and reduced (but not below zero) by any payments on the RSA. Because the RSAs are characterized as contingent payment debt instruments under the Code and Treasury Regulations, any gain recognized upon a sale, exchange, retirement, or other disposition of an RSA will generally be treated as interest income and any loss will be ordinary to the extent of prior interest income inclusion.

Backup withholding with respect to the Revenue Share Series I

Under certain circumstances, interest paid on an RSA may be subject to "backup withholding" of federal income tax. Backup withholding does not apply to corporations and certain other exempt recipients which may be required to establish their exempt status. Backup withholding generally applies if, among other circumstances, a non-exempt holder fails to furnish his or her correct social security number or other taxpayer identification number. Special backup withholding rules may apply when payment is made through one or more financial institutions or by a custodian, nominee, broker or other agent of the shareholder. If applicable, holders should contact their brokers to ensure that the appropriate procedures are followed which will prevent the imposition of backup withholding.

General tax considerations

PROSPECTIVE PURCHASERS OF THE RSAS ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAX CONSEQUENCES OF ACQUIRING, OWNING, AND DISPOSING OF, THE RSAS AS WELL AS THE APPLICATION OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS. ANY FEDERAL TAX DISCUSSION CONTAINED IN THESE OFFERING MATERIALS, INCLUDING ANY ATTACHMENTS, WAS WRITTEN IN CONNECTION WITH THE OFFERING OF THE RSAS BY THE COMPANY, AND IS NOT INTENDED OR WRITTEN TO BE USED, BY ANYONE FOR THE PURPOSE OF AVOIDING FEDERAL TAX PENALTIES THAT MAY BE IMPOSED BY THE FEDERAL GOVERNMENT. NOTHING IN THESE OFFERING MATERIALS SHALL BE DEEMED TAX OR LEGAL ADVICE BY THE COMPANY OR ITS MEMBERS.

The information herein summarizes certain material U.S. federal income tax aspects of the purchase and ownership of the RSAs. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), the regulations thereunder, published administrative rulings, and judicial decisions in effect on the date of the Offering Materials. No assurance can be given that future legislative or administrative changes or court decisions will not significantly modify the statements expressed in these Offering Materials. Any such changes may or may not be retroactive with respect to transactions completed prior to the effective dates of such changes. The following discussion is a general discussion of U.S. federal income tax consequences of investing in RSAs by individuals and does not purport to deal with all federal income tax consequences applicable thereto or the federal income tax consequences applicable to all categories of investors, some of which may be subject to special rules (e.g., investors who do not reside in or citizens of the U.S.).

This information is not intended as a substitute for careful tax planning. Any federal tax discussion contained in these Offering Materials, including any attachments, was written in connection with the offering of RSAs by the Company, and is not intended or written to be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government. Prospective investors are urged to consult their own tax advisors, lawyers, or accountants with specific reference to their own tax situations.

An investment in the Revenue Share Series I is speculative and involves a high degree of risk

AN INVESTMENT IN THE COMPANY SHOULD NOT BE MADE BY PERSONS UNABLE TO BEAR THE RISK OF LOSS OF THEIR ENTIRE INVESTMENT OR BY PERSONS WHO MAY HAVE A NEED FOR LIQUIDITY FROM THEIR INVESTMENT. IN MAKING AN INVESTMENT DECISION, YOU MUST RELY ON YOUR EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED. LIKE ALL INVESTMENTS, AN INVESTMENT IN THE COMPANY INVOLVES THE RISK OF THE LOSS OF CAPITAL, AND THE RSAs SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF HIS, HER OR ITS ENTIRE INVESTMENT. INVESTORS MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE COMPANY FOR AN INDEFINITE PERIOD OF TIME AND BE ABLE TO WITHSTAND A TOTAL LOSS OF THEIR INVESTMENT. PROSPECTIVE INVESTORS ARE ENCOURAGED TO CONSULT THEIR OWN INVESTMENT OR TAX ADVISORS, ACCOUNTANTS, LEGAL COUNSEL, OR OTHER ADVISORS TO DETERMINE WHETHER AN INVESTMENT IN THE RSAs IS APPROPRIATE.

The Revenue Share Series I have not been registered under the Securities Act

THE RSAS OFFERED BY THE COMPANY HAVE NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. THE INVESTMENT CONTEMPLATED BY THE RSAs HAS NOT BEEN RECOMMENDED, APPROVED, OR DISAPPROVED BY THE SEC, OR ANY STATE SECURITIES COMMISSION, OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THESE AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY, COMPLETENESS, OR ADEQUACY OF THE OFFERING MATERIALS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Investors will be subject to certain suitability requirements

THE RSAS WILL NOT BE SOLD TO AN INVESTOR UNTIL SUCH INVESTOR DELIVERS AN EXECUTED REPRESENTATION, AS CONTAINED IN THE QUALIFIED INVESTOR QUESTIONNAIRE AND SUBSCRIPTION AGREEMENT, THAT HE, SHE OR IT IS A QUALIFIED INVESTOR AND MEETS CERTAIN STANDARDS. PERSONS WHO ARE NOT QUALIFIED INVESTORS ARE NOT PERMITTED TO INVEST. THE FACT THAT A PERSON IS A QUALIFIED INVESTOR REPRESENTS THE MINIMUM SUITABILITY REQUIREMENT FOR AN INVESTOR, AND COMPLIANCE WITH SUCH STANDARDS DOES NOT NECESSARILY INDICATE THAT THIS WOULD BE A SUITABLE INVESTMENT FOR SUCH PERSON.

There is no market for the Revenue Share Series I and no such market is expected to develop

THE RSAS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION FROM THESE LAWS, OR IF THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED. INVESTORS MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THE INVESTMENT IN THE COMPANY FOR AN INDEFINITE PERIOD OF TIME. PERSONS WHO DESIRE LIQUIDITY FROM THIS INVESTMENT SHOULD NOT INVEST.

The Company will have the right to refuse any subscription in its sole discretion

THE COMPANY WILL HAVE THE RIGHT TO REFUSE ANY SUBSCRIPTION IN ITS SOLE DISCRETION AND FOR ANY REASON (OR NO REASON), INCLUDING THE COMPANY’S BELIEF THAT AN INVESTOR DOES NOT MEET THE APPLICABLE SUITABILITY REQUIREMENTS OR THAT EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF ANY APPLICABLE JURISDICTION ARE NOT AVAILABLE WITH RESPECT TO THE ISSUANCE OF THE RSAS TO ANY INVESTOR UNDER THIS OFFERING. THE COMPANY MAY MAKE OR CAUSE TO BE MADE SUCH FURTHER INQUIRY AND OBTAIN SUCH ADDITIONAL INFORMATION AS IT DEEMS APPROPRIATE WITH REGARD TO THE SUITABILITY OF PROSPECTIVE INVESTORS. THE COMPANY RESERVES THE RIGHT TO MODIFY THE SUITABILITY STANDARDS WITH RESPECT TO CERTAIN INVESTORS IN ORDER TO COMPLY WITH ANY APPLICABLE STATE OR LOCAL LAWS, RULES, REGULATIONS OR OTHERWISE.

The information presented in the Offering Materials was prepared by the Company and is being furnished solely for your use in connection with the Offering

THE OFFERING MATERIALS (TOGETHER WITH ANY AMENDMENTS OR SUPPLEMENTS AND ANY OTHER INFORMATION THAT MAY BE FURNISHED BY THE COMPANY) INCLUDES OR MAY INCLUDE CERTAIN FORWARD-LOOKING STATEMENTS, ESTIMATES, AND PROJECTIONS WITH RESPECT TO THE COMPANY'S ANTICIPATED FUTURE PERFORMANCE. EXAMPLES OF FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING THE COMPANY'S FUTURE SALES, PURCHASE ORDERS, FINANCIAL RESULTS, OPERATING RESULTS, ACQUISITIONS, BUSINESS AND MONETIZATION STRATEGIES, PROJECTED COSTS, REVENUES, PRODUCTS, COMPETITIVE POSITIONS AND PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS. IN SOME CASES, FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "WOULD," "EXPECTS," "PLANS," "ANTICIPATES," "BELIEVES," "ESTIMATES," "PREDICTS," "POTENTIAL," "CONTINUE," OR THE NEGATIVE OF THESE TERMS OR OTHER COMPARABLE TERMINOLOGY. SUCH FORWARD-LOOKING STATEMENTS, ESTIMATES, AND PROJECTIONS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND REFLECT VARIOUS ASSUMPTIONS OF THE COMPANY'S MANAGEMENT THAT MAY OR MAY NOT PROVE CORRECT AND INVOLVE VARIOUS RISKS AND UNCERTAINTIES OVER WHICH THE COMPANY MAY HAVE NO INFLUENCE OR CONTROL. NO INDEPENDENT PARTY HAS VERIFIED OR CONFIRMED THE REASONABLENESS OF THE ASSUMPTIONS THAT FORM THE BASIS OF THE FORECASTS. THESE AND MANY OTHER FACTORS COULD AFFECT THE COMPANY'S FUTURE FINANCIAL AND OPERATING RESULTS, AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM EXPECTATIONS BASED ON FORWARD-LOOKING STATEMENTS MADE IN THE OFFERING MATERIALS OR ELSEWHERE BY THE COMPANY (OR ON ITS BEHALF). THE LIKELIHOOD OF THE COMPANY'S SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS, AND DELAYS FREQUENTLY ENCOUNTERED IN CONNECTION WITH GROWING A STARTUP BUSINESS. THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL GENERATE ANY PARTICULAR LEVEL OF REVENUE OR WILL BE ABLE TO CONTINUE TO OPERATE PROFITABLY. LOCALSTAKE EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING INVOLVEMENT IN OR RESPONSIBILITY FOR ANY FORWARD LOOKING STATEMENTS CONTAINED IN THE OFFERING MATERIALS.

Only the Offering Materials may be relied upon in connection with this Offering

ONLY THE INFORMATION EXPRESSLY SET FORTH IN THE OFFERING MATERIALS OR CONTAINED IN DOCUMENTS FURNISHED BY THE COMPANY UPON REQUEST MAY BE RELIED UPON IN CONNECTION WITH THIS OFFERING. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE OFFERING MATERIALS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. ACCESS TO THE OFFERING MATERIALS AT THIS TIME DOES NOT IMPLY THAT INFORMATION THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THIS DATE.

The Offering Materials do not purport to be all-inclusive

THE OFFERING MATERIALS PROVIDED TO INVESTORS DO NOT PURPORT TO BE ALL-INCLUSIVE OR CONTAIN ALL OF THE INFORMATION THAT YOU MAY DESIRE IN INVESTIGATING THE COMPANY. YOU MUST RELY ON YOUR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED IN MAKING AN INVESTMENT IN THE RSAs. PRIOR TO MAKING AN INVESTMENT DECISION, YOU SHOULD CONSULT YOUR OWN COUNSEL, ACCOUNTANTS, AND OTHER ADVISORS AND CAREFULLY REVIEW AND CONSIDER ALL OF THE OFFERING MATERIALS PROVIDED AND THE OTHER INFORMATION THAT YOU ACQUIRE. YOU SHOULD NOT CONSTRUE ANY STATEMENTS MADE IN THE OFFERING MATERIALS PROVIDED AS INVESTMENT, TAX OR LEGAL ADVICE.

The Company reserves the right to reject some or all of any prospective investment

THE OFFER OF THE RSAS BY THE COMPANY IS SUBJECT TO PRIOR SALE AND CERTAIN OTHER CONDITIONS. THE COMPANY RESERVES THE RIGHT, IN THE COMPANY'S SOLE DISCRETION AND FOR ANY REASON, TO WITHDRAW, CANCEL, OR MODIFY THE OFFERING AND TO ACCEPT OR REJECT SOME OR ALL OF ANY PROSPECTIVE INVESTMENT. THE COMPANY WILL HAVE NO LIABILITY TO ANY PROSPECTIVE PURCHASER IN THE EVENT THAT THE COMPANY TAKES ANY OF THESE ACTIONS.

The terms, conditions and restrictions of the Revenue Share Series I are fully set forth in the Offering Materials

THE TERMS, CONDITIONS AND RESTRICTIONS OF THE RSAS ARE FULLY SET FORTH IN THE REVENUE SHARING AGREEMENT, WHICH YOU WILL BE REQUIRED TO EXECUTE IF YOU DECIDE TO INVEST, THE FORM OF WHICH HAS BEEN PROVIDED TO YOU IN THE OFFERING MATERIALS SECTION FOR THIS OFFERING ON THE LOCALSTAKE MARKETPLACE PLATFORM. YOU SHOULD NOT INVEST UNLESS YOU HAVE COMPLETELY AND THOROUGHLY REVIEWED THE PROVISIONS OF THE REVENUE SHARING AGREEMENT. IN THE EVENT THAT ANY OF THE TERMS, CONDITIONS, OR OTHER PROVISIONS OF THE REVENUE SHARING AGREEMENT ARE INCONSISTENT WITH OR CONTRARY TO THE INFORMATION PROVIDED IN THE OFFERING MATERIALS, THAT AGREEMENT WILL CONTROL. ANY ADDITIONAL INFORMATION OR REPRESENTATIONS GIVEN OR MADE BY THE COMPANY IN CONNECTION WITH THE OFFERING, WHETHER ORAL OR WRITTEN, ARE QUALIFIED IN THEIR ENTIRETY BY THE INFORMATION SET FORTH IN THE OFFERING MATERIALS, INCLUDING, BUT NOT LIMITED TO, THE RISKS OF INVESTMENT.

No solicitation in any state or other jurisdiction in which such solicitation is not authorized

THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITY IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED. EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THE DATE THE OFFERING WAS INITIATED. NEITHER ACCESS TO THE OFFERING MATERIALS NOR ANY SALE OF THE RSAS SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE COMPANY'S AFFAIRS AFTER THE DATE THE OFFERING WAS INITIATED.

Each investment is subject to the terms and conditions of the Investor Registration Agreement

EACH PROSPECTIVE INVESTOR'S SUBSCRIPTION FOR AND PURCHASE OF AN RSA IS GOVERNED BY, AND SUBJECT TO, THE TERMS AND CONDITIONS OF THE INVESTOR REGISTRATION AGREEMENT ENTERED INTO BETWEEN LOCALSTAKE AND SUCH PROSPECTIVE INVESTOR, INCLUDING, WITHOUT LIMITATION, THE INVESTMENT LIMITS ESTABLISHED BY LOCALSTAKE FOR SUCH PROSPECTIVE INVESTOR, LOCALSTAKE'S RIGHTS TO TERMINATE THE OFFERING OR ANY PROSPECTIVE INVESTOR'S REGISTRATION WITH LOCALSTAKE.

Securities to be offered to investors

The offering materials being provided to you relate to the offer and sale of revenue sharing agreements (collectively, "RSAs" and each, an "RSA") in ESTERCUVÉE, LLC, an Indiana limited liability company (the "Company").  The Company is seeking to raise up to $160,000 (the “Offering Amount”) through the offer and sale of the RSAs (the "Offering").  The RSAs entitle investors to their pro rata share of up to 6.25% (the "Revenue Share Percentage") of the gross revenue collected by the Company each calendar month, commencing with the first full calendar month immediately following the closing (the “Closing”) of the Offering applicable to the Subscriber’s subscription, as defined in the Revenue Sharing Agreement, until such time as the investor has received payments totaling in the aggregate 1.25 times such investor’s original investment amount (the "Maximum Revenue Share Amount").  If the Company raises the entire Offering Amount, the Revenue Share Percentage will be 6.25%. If the Company raises less than the entire Offering Amount, the Revenue Share Percentage will be a percentage equal to the greater of 4.5% and the value determined by the following formula: ((total amount raised in this Offering/$160,000) x 6.25%).

Closing procedures for the Offering

The Offering shall be available to potential investors until the final Closing of the sale and purchase of the RSAs (the “Final Closing”), which will occur upon the earlier of (i) the date the Company has closed on the purchase and sale of RSAs for the entire Offering Amount, or (ii) the Company terminates the Offering in its sole and absolute discretion (the “Termination Date”). The RSAs are offered by the Company on a best efforts basis as specified herein. There is no aggregate minimum amount of RSAs that must be sold in the Offering, and each individual investment transaction will be closed on an investor-by-investor basis upon the Company’s acceptance of an Subscriber’s subscription for an RSA by its execution of such Subscriber’s Qualified Investor Questionnaire and Subscription Agreement, together with a form of payment as specified on the Localstake Marketplace platform. There is no provision for the escrow of any part of the proceeds from the sale of the RSAs prior to the termination of the Offering, and unless a Subscriber cancels their investment commitment in the RSA within forty-eight (48) hours after the Company’s acceptance of such Subscriber’s Qualified Investor Questionnaire and Subscription Agreement by its execution thereof, there will be no refunds of amounts tendered unless the subscription is rejected by the Company. The Company will immediately use the net proceeds of this Offering as such funds are raised.

Certain risks associated with best efforts offerings

There can be no assurances that the Company will raise the entire Offering Amount or the entire amount of any targeted amount of commitments set forth on the Localstake Marketplace Platform. Potential investors that have expressed an interest in the Offering and indicated a commitment amount may subsequently cancel their investment commitment, fail to fund all or a portion of their commitment amount, or the Company may reject all or a portion of their commitment amount. Subscribers should not place any reliance on the Company’s receipt of commitments in an amount equal to or greater than the targeted minimum amount of commitments set forth on the Localstake Marketplace Platform as an indication that the Company has or will receive such amount. Upon a Subscriber’s subscription for an RSA becoming irrevocable as set forth below, such Subscriber shall be required to pay his, her or its investment funds to the Company regardless of the amount of Offering proceeds received by the Company as of such date.

The Company's acceptance of investments and cancellations

The Company reserves the right to accept a Subscriber’s subscription for an RSA at any time prior to the expiration or termination of the Offering and may reject subscription documents based upon the Company’s review thereof for any reason or for no reason. Subscribers may cancel their investment commitment in the RSAs for any reason up to forty-eight (48) hours after the Company’s acceptance of such Subscriber’s Qualified Investor Questionnaire and Subscription Agreement by its execution thereof. If a Subscriber has not canceled his, her or its investment commitment in the RSAs prior to such deadline, the Subscriber's subscription for the RSA shall be irrevocable by the Subscriber, and, if the Subscriber has chosen to transfer their investment funds electronically, these funds will be transferred from their linked bank account as specified on the Localstake Marketplace Platform to a deposit account in the name of the Company.

Securities laws being utilized and investor qualifications

This Offering is made in reliance upon exemptions from registration under the Securities Act, as set forth in Sections 3(b) and 4(2) thereof and in the rules of Regulation D promulgated thereunder. Regulation D sets forth certain restrictions as to the nature of purchasers of securities offered pursuant thereto. The RSAs will be offered and sold only to persons who are either (i) "accredited investors" ("Accredited Investors") as defined in Rule 501(a) of Regulation D promulgated by the United States Securities and Exchange Commission under the federal Securities Act of 1933, as amended (the "Securities Act"), (ii) persons who have, either alone or with a purchaser representative, such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of the prospective investment, or (iii) "non-accredited investors" whose investment in the RSAs would not equal or exceed any percentage or dollar limit imposed by the registration exemption being relied upon in their state of residence ((i), (ii) and (iii) collectively referred to as the "Qualified Investors"), and who meet certain other qualifications.  The minimum investment that will be accepted by the Company from a Qualified Investor is $1,000.

Use of proceeds in the Offering

The Company intends to use the net proceeds of this Offering for equipment purchases and location buildout, general working capital purposes and other necessary expenditures as determined in the discretion of management of the Company.

Subscribing for an investment and transferring funds

Persons interested in subscribing for the RSAs will be required to complete and return to the Company a Qualified Investor Questionnaire and Subscription Agreement, and will be required to become a party to a Revenue Sharing Agreement, which fully provides for the terms of the RSAs. Payment totaling the investment amount can be made by domestic wire, check or ACH transfer if such functionality is available. Instructions for each method of payment will be provided upon investment over the Localstake Marketplace platform.

Fees for placement agent services

As compensation for Localstake Marketplace LLC’s ("Localstake") services in connection with the Offering, Localstake shall be entitled to receive a placement fee paid by the Company (the "Placement Fee").

  • Gross Proceeds: $160,000
  • Estimated Placement Fee: $5,400
  • Net Proceeds: $154,600

(1) Estimated placement fee payable by the Company to Localstake. The Company will pay a Placement Fee of 3.0% on all Gross Proceeds received by the Company from the sale of the RSAs in the Offering during the time period in which the offering is only available to those investors which the Company maintains a pre-existing relationship (the "Private Phase"). Thereafter, once the Offering is made available to all eligible investors on the Localstake Marketplace Platform, the Company will pay a Placement Fee of 5.0% on all Gross Proceeds received by the Company from the sale of the RSAs in the Offering. The resulting aggregate Placement Fee will be discounted by a $1,000 Offering Preparation fee paid prior to the Offering.

An investment in the Company involves a high degree of risk, and should be regarded as speculative. Prospective investors should carefully consider these investment risks, among others, in addition to the other information presented in the Offering Materials, in evaluating the Company for investment. The risks listed herein are not a complete list of potential risks facing the Company and it may encounter unexpected risks in the future, which, may adversely affect its performance.

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