Impact Industry Cacao - Update 3

MORE COMMITMENTS. UPDATE ON VALUATION

Impact Industry Cacao - Update 3

The most wild things continue to happen every single day.

If you are new today, you can find previous updates here

For those of you that still haven’t scheduled a meeting. Reply to this email with a time or schedule time here, the deck is attached in the link. I’m tracking you in an Airtable so until you say no, I’m going to figure out a way to meet you.

I expect to have another 60 meetings before next Wednesday!

Here’s Current Stats: Over $640,000 of total interest, three confirmed commitments, and tomorrow I have 8 calls.

Key Highlights from Today:

  1. Engaged with DLAPiper - Puerto Rico one of the top corporate law firms in the US. I told them they needed to help us close this by 4/19 and they said they could get it done.

  2. FIRM Commitment from one our most viral twitter friends and he is coming on as an advisor! I need to get him a contract before I let you know who because of how valuable I view him. (maybe another one is joining us tomorrow)

  3. FIRM Commitment from strategic investor who has key relationships in the Puerto Rico financial system.

  4. MOST IMPORTANT long conversation all in Spanish with Juan’s team. I cannot tell you how much energy, meetings in Spanish give me. If you can’t read Spanish basically he says WE ARE ROOTING FOR YOU and CAN’T WAIT TO DO BUSINESS WITH YOU BECAUSE GOD BROUGHT US TOGETHER.

Update on Valuation and Structure - This is firm and WILL NOT CHANGE

Given the significant level of interest we are updating the valuation’s here is how it breaks down. DLAPiper is drafting the documents and creating an escrow account for you to securely wire funds managed by 3rd party.

Valuation:

  • Up to $5M Pre-Money Valuation Cap

  • Equity Raise: 33% of the shares. (Max Raise: $1.7M)

  • Example: If we have $1M investments, investors will own 33% at $3M, If we fully subscribe investors will own 33% at $5M Valuation

  • Shares: Everyone will be issued common shares

Cap Table Structure:

  • 56.6%: Owned by Hunter Durham’s family

  • 10%: Set Aside for Advisors, Employees, and Board of Directors

  • 33.3%: - Allocated to investors as outlined aboved

Capital Allocation and Exit Strategy

  • No debt will be held at the holding company level

  • We will use as minimum leverage as absolutely necessary

  • First investments made will be directed towards immediate cash flow opportunities/critical infrastructure that we need to unlock the business.

  • 5 Year Holding Period for QSBS incentives, at year 5 will will open back up investment at the holding company.

Competitive Advantages and Strategy:

Here’s a core belief, (that I stole from another important investor I know), over the long term Owned Distribution and Relationships will be the competitive advantage and that is even more apparent in Puerto Rico

  • Owned Distribution Channels: AKA Media and Impressions

  • Puerto Rico First Mentality: Optics matter, and this is to better the entire people and country

  • Tax Advantages and Credits: As shared yesterday there is a bunch of FREE money to take advantage of from agriculture credits, tourism tax incentives, export services, R&D, manufacturing. Holding companies main responsibility to maximize our returns leveraging existing incentives.

Impact Industry Cacao Mandate: Allocate capital to highest and best use of capital to support the Puerto Rico Cacao industry and the individuals who are doing the most impressive things.

Here’s How you can Help

Okay, that’s it for tonight.

It’s humbling to have you a part of this journey

-Hunter

(Feel free to send this to a friend.)