Investment Overview

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US Capital Investment Management

480 Holdings Limited, LLC


US Capital Investment Management

INVESTMENT OPPORTUNITY


US Capital Global Securities (“USCGS”) is offering 150 Membership Units in USCIM Fund XXVI 480 Holdings, LLC (“Fund XXVI”, the “Issuer”), a pooled investment vehicle, on a “best efforts” basis. The Fund XXVI will be managed by San Francisco-based asset management firm US Capital Investment Management, LLC (“USCIM” or the “Manager”), investing in Senior Convertible Notes of 480 Holdings Limited, LLC. (“480 Holdings” or the “Company”). The note will pay an 8% coupon annually for a 24-month term, payable at maturity. The note will automatically convert into Series C non-voting common stock in the event of a $15M equity offering or voluntarily at the option of the investor at any time. The Company will use the new financing for site preparation and construction, cash reserve, debt repayment and working capital for current and future business needs.

Institutional and strategic investors welcome to provide separate offer for investment.


COMPANY OVERVIEW


Formed in 2015, 480 Holdings Limited, LLC is a Delaware limited liability company based in Tijeras, New Mexico.  480 Holdings plans to bottle and sell premium Fiji natural spring water under the brand Yaqara WaterTM (“Yaqara”). To date, the Company’s primary work has been to organize and prepare the extraction, bottling, marketing and sales of bottled drinking water from Fiji. Main milestones achieved include:

  • secured three 99-year leases for water extraction and an additional 99-year lease for maintenance, storage and a solar energy system in the Yaqara Valley;
  • received Fiji government zoning and planning approval for the development of a bottling plant;
  • received technical validation from 3rd party studies;
  • acquired certain intellectual property rights in the main international markets

Development Milestones


The 480 Holdings plan is contingent on the successful completion of the proposed $15M convertible note offering and  anticipates additional capital required to fund the complete construction, commence production, and launch distribution of product into international markets.


US Capital Investment Management

The Company plans to complete the final design and engineering of the bottling plant approximately 6 months after this offering investment is completed. The Company anticipates construction of the bottling plant will be completed in under 30 months, including infrastructure (i.e. roads) and the installation of equipment. Production and operations are expected to commence with retail delivery occurring by Q3 of Year 3.


THE PRODUCT


Yaqara’s water source is natural, premium Fiji “spring” water and is harvested from a pure rainforest aquifer in the Yaqara Valley on the main island of Viti Levu, Fiji¹. The Company has developed a bottle, logo and label design, and acquired certain intellectual property rights for trademarking and branding its bottled water in targeted international markets.


US Capital Investment Management

480 Holdings’ main competitor, the Fiji Water Company, has successfully branded water from the Yaqara Valley as one of the purest, premium waters in the world, demonstrating a willingness by the consumers to pay a premium price.


Water Extraction Rights, Exclusivity and Availability


In January 2016, the Company, through its Fijian subsidiary, 480 Holdings – Fiji, secured two 99-year leases for a total of 287 acres (116 hectares) of land in Yaqara Valley, on the main island of Viti Levu, from the Fiji government. Included with the lease is a government granted 14,880-acre surrounding buffer zone restricting any third parties from extracting water from inside that zone². The Company plans to contribute 1.0% of its annual gross revenues to  480 Holdings Humanitarian Fund to assist the local families of the villages near the bottling plant to improve their living environment and improve educational opportunities. In April 2017, the Company secured an additional lease of adjacent acres with water extraction rights within its protected buffer zone.


1. Source: ‘Matalevu Spring Catchment Hydrogeology Assessment’, WWA, Feb. 12, 2017.
2. Source: ’480 Holdings Lease Agreements’, Annex C, Section 13.


Bottling Plant


480 Holdings received zoning and planning approval for the development of a bottling plant in Yaqara valley.


Third-Party Validation – Technical Reports


In 2014, Riley Consultants Ltd. (“Riley”), a geo-tech and hydrological firm based in New Zealand, was engaged to address the questions by Fiji Department of Environment regarding the Environment Assessment report presented by 480 Holdings, a necessary step to obtain the two water extraction leases.

In February 2017, Williamson Water Advisory (WWA), a water quality and resource assessment firm based in New Zealand, conducted a hydrogeological analysis on the Matalevu Spring aquifer. The study’s main findings include: (a) quantity of water safely extractable to be equal to 20 liters per second; (b) average annual recharge rate to be approximately 1.5 billion liters; (c) water quality of Matalevu Spring to be defined as pristine and to meet all the US FDA drinking water standards³.


Total Addressable Market


The world premium bottle water consumption approached 2.7 billion liters in 2014 and is expected to exceed 4 billion liters by 2019, according to Beverage Marketing Corporation (BMC) 4. 480 Holdings is targeting approximately a 10% share of the US market and 8% share of other major markets in Asia and Europe by 2021-22.


US Capital Investment Management

Sales and Marketing Strategy


480 Holdings has engaged Beverage Marketing Corporation (BMC), a beverage consulting firm with over 40-year experience within the industry, to prepare its global marketing and distribution plan. The Company plans to distribute through wholesale channels (i.e. beverage and restaurant food distributors, trading companies) with promotion programs tied to retail marketers (large retail chains, finer supermarkets, hotels and institutional markets such as offices, airlines and corporate facilities).


3. Source: ‘Matalevu Spring Catchment Hydrogeology Assessment’, WWA, Feb. 12, 2017.
4. Source: BMC market research as Feb. 17, 2016 and commissioned by the Company.



COMPANY’S MANAGEMENT TEAM


Patrick Scanlon, Chief Executive Officer & Chief Operating Officer


Mr. Scanlon has over 40 years of experience in planning, designing, producing and project managing the development of world-class destination attraction projects. Before joining the Company, Mr. Scanlon held different positions in the leadership team of Walt Disney Imagineering for 18 years, including Senior Vice President, Project Management (U.S. and Japan) and Vice President, Business and Marketing Development. Mr. Scanlon received his bachelor’s degree in economics from the University of California at Santa Barbara and his master’s degree in finance from the UCLA Graduate School of Management.


Gobind Singh Khalsa, Chief Financial Officer


Mr. Khalsa has over 20 years of experience in finance, accounting, and transaction advisory consulting. Prior to 480 Holdings, he founded and served as Chief Executive Officer of Squarebid, an internet platform for exchanging services. Mr. Khalsa also served as Chief Financial Officer of Catholic Charities, Managing Director and Management Consultant at Makal Consulting, Manager with Ernst & Young and Arthur Anderson.



BOARD OF DIRECTORS


Brian Sudano, Director


Mr. Sudano is Managing Director and COO of BMC Strategic Associates. Before joining BMC, Mr. Sudano was a senior executive with Constellation Brands, a global wine company, and held various senior positions at Joseph E. Seagram & Sons. Mr. Sudano received an MBA with honors from Rutgers Graduate School of Management and is a New Jersey Certified Public Accountant.


Douglas Holt, Chairman of the Board of Directors


Mr. Holt is Chief Executive Officer of DDH Consulting. Prior to DDH Consulting, Mr. Holt was Vice President and General Manager of TaylorMade-Adidas Golf Company, Director of Sales for Nike Golf and spent twenty-four years with Spalding Sports Worldwide.



COMPANY’S FINANCIAL SNAPSHOT


Income Statements

Pro forma data are contingent to successful and full completion of the proposed $15M capital raise, expected additional capital injections, and execution by management team.

Numbers in thousands, for year-ending December 31.


US Capital Investment Management

1. The Company has engaged BMC for the marketing and distribution plan. The Company plans to engage HLK Jacob Ltd, a New Zealand consulting firm with over 10-year experience in engineering and construction management, as project development and construction manager.



SOURCES AND USES OF FUNDS


US Capital Investment Management

INVESTMENT OPPORTUNITY

The Company shall issue secured convertible note through a private placement to raise $15.0 million.


US Capital Investment Management

CONVERTIBLE NOTE TERMS


US Capital Investment Management

RISK FACTORS


You should be aware that an investment in Units of the Issuer, and the Issuer’s investment in Company Securities, involves considerable risks, including the possible loss of all or a material portion of your investment. The abbreviated risks set forth below, as well as the detailed risk factors set forth in the Confidential Offering Memorandum and Supplement, are not the only risks facing investors. The abbreviated risks set forth below, as well as the detailed risk factors set forth in the Confidential Offering Memorandum and Supplement, are not the only risks facing investors.

The Company plans to bottle and sell Fiji natural spring water worldwide. The Company is subject to a number of significant risks that could result in a reduction in its value and the value of the Company Securities, potentially including, but not limited to:

  • The Company has limited operating history.
  • The Company relies on third party vendors for various services.
  • Access to water and action by governments to restrict access to water and the Company’s products could harm the Company’s business.
  • Exchange rate fluctuations could reduce the Company’s earnings when stated in U.S. dollars.
  • The Company’s business is subject to the risk that the politics and government of Fiji could face upheaval or disruption.
  • The Company will require additional capital to support its operations or the growth of its business, and it cannot be certain that this capital will be available on reasonable terms when required, or at all.
  • The markets the Company intends to enter are served by well-established firms selling a variety of beverages.
  • The Company presently depends on Robert G. Bishop and Board of Directors to make its executive and development decisions and to provide vision and direction to the Company and Manager.
  • The Company recently experienced a change of management.
  • There may be conflicts of interest between the Manager and the Company.
  • The Company is indirectly controlled by majority shareholder.
  • There may be tax risks to the Company and its Members.
  • The IRS could disallow various deductions claimed.
  • The Company is unable to fully account for approximately $1,100,000 of the expenses that were paid in cash during the development stage of business in 2014, 2015, and 2016.

Investors must understand that by purchasing Units they are voluntarily assuming all of the risks of the investment, including any and all risks relating to the Company and Company Securities, whether disclosed in this Fund Summary, Offering Memorandum and Supplement or not.


CONFLICT OF INTEREST DISCLOSURES


The Manager and USCGS are affiliated entities. Charles Towle is Co-Managing Partner of the Manager, the Division Head and licensed principal of USCGS, and an indirect stockholder and Co-Managing of an affiliate company of the Manager and USCGS. Jeffrey Sweeney is Co-Managing Partner of the Manager and an indirect controlling stockholder of the Manager and USCGS. Conflicts of interest may arise in connection with Mr. Towle’s and Mr. Sweeney’s indirect control of both the Manager and USCGS. Investors should be aware that these conflicts of interest, and a number of other conflicts of interest relating to the Manager and its affiliates, are permitted under the terms of the Fund’s offering documents. You should not invest in the Fund unless you are willing to accept these conflicts of interest and the associated risk.


DISCLOSURES


This presentation does not constitute an offer to sell or a solicitation of an offer to buy any security and may not be relied upon in connection with the purchase or sale of any security. Any offer would only be made by means of a formal offering memorandum. No offer or solicitation will be made prior to delivery of a confidential information memorandum, private placement memorandum, or similar offering documents (“Offering Documents”). Offers and sales will be made only in accordance with applicable security laws and pursuant to the Offering Documents, operating agreement, subscription agreement, and other definitive documentation.

This presentation does not purport to be all-inclusive or to contain all of the information that the recipient may require and is qualified in its entirety by reference to the Offering Documents. This presentation is not a part of or supplemental to the Offering Documents or such definitive documentation. The Offering Documents and any supplements will supersede this presentation in its entirety. Projections and other forward-looking information as to events that may occur in the future (including projections of revenue, expense, net income and stock performance) are based on information provided by the Fund and other publicly available information as of the date of this presentation. There is no guarantee that any of these estimates or projections will be achieved. The recipient should not rely on any information contained herein. No investment, divestment or other financial decisions or actions should be based solely on the information in this presentation. Actual results will vary from any projections in this presentation, and such variations may be material, including the possibility that an investor may lose some or all of its invested capital.

This presentation is confidential. By acceptance hereof, you agree that (i) the information must not be used, reproduced, or distributed to others without prior written consent; (ii) you will maintain the confidentiality of all information herein that is not already in the public domain; and (iii) you will use the information contained herein solely for preliminary informational purposes.

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Securities offered through US Capital Global Securities, LLC, member FINRA, SIPC.

IMPORTANT: All investing is risky, and no investor should decide to commit funds without first consulting with a competent professional adviser. Some or all invested funds can be lost. The past performance of any investment, investment strategy or investment style is not indicative of future performance. Future results may vary, and are not guaranteed. The value of investments and their income may increase or decrease, and a loss of principal – including all principal – may occur.

For more investor information or support please call 415-889-1010 or email support@uscgs.com