QUILA MARIA'S MARGARITAS, LLC
Private Placement Memorandum
Class A Limited Liability Company
$1.00 PER UNIT
MARCH 17, 2017
QUILA MARIA'S MARGARITAS, LLC (the “Company” or “QUILA MARIA'S ”), a Florida Limited Liability Company, is offering a maximum of 1,000,000 Class A Membership Units for $1.00 per unit. The offering price per unit has been arbitrarily determined by the Company. The minimum purchase requirement for Units is 350 Units. See Risk Factors: Offering Price
THESE ARE SPECULATIVE SECURITIES, WHICH INVOLVE A HIGH DEGREE OF RISK. ONLY THOSE INVESTORS WHO CAN BEAR THE LOSS OF THEIR ENTIRE INVESTMENT SHOULD INVEST IN THESE UNITS.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), THE SECURITIES LAWS OF THE STATE OF FLORIDA, OR UNDER THE SECURITIES LAWS OF ANY OTHER STATE OR JURISDICTION IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED BY THE ACT AND REGULATION CF PROMULGATED THEREUNDER, AND THE COMPARABLE EXEMPTIONS FROM REGISTRATION PROVIDED BY OTHER APPLICABLE SECURITIES LAWS.
THE OFFERING IS NOT UNDERWRITTEN. THE UNITS ARE OFFERED ON A “BEST EFFORTS” BASIS BY THE COMPANY THROUGH ITS MANAGING MEMBERS. THE COMPANY HAS NOT SET A MINIMUM OFFERING AMOUNT FOR THIS OFFERING. ALL PROCEEDS FROM THE SALE OF UNITS WILL BE DELIVERED DIRECTLY TO THE COMPANY’S CORPORATE ACCOUNT AND BE AVAILABLE FOR IMMEDIATE USE BY THE COMPANY AT ITS DISCRETION. UNITS MAY ALSO BE SOLD BY FINRA MEMBER BROKERS OR DEALERS WHO ENTER INTO A PARTICIPATING DEALER AGREEMENT WITH THE COMPANY, WHO WILL RECEIVE COMMISSIONS OF UP TO 10% OF THE PRICE OF THE UNITS SOLD. THE COMPANY RESERVES THE RIGHT TO PAY EXPENSES RELATED TO THIS OFFERING FROM THE PROCEEDS OF THE OFFERING. SEE “PLAN OF PLACEMENT AND USE OF PROCEEDS” SECTION. THE OFFERING WILL TERMINATE ON THE EARLIEST OF: (A) THE DATE THE COMPANY, IN ITS DISCRETION, ELECTS TO TERMINATE, OR (B) THE DATE UPON WHICH ALL UNITS HAVE BEEN SOLD, OR (C) AUGUST 15, 2017, OR SUCH DATE AS MAY BE EXTENDED FROM TIME TO TIME BY THE COMPANY, BUT NOT LATER THAN 180 DAYS THEREAFTER (THE “OFFERING PERIOD”).
THIS OFFERING IS NOT UNDERWRITTEN. THE OFFERING PRICE HAS BEEN ARBITRARILY SET BY THE MANAGEMENT OF THE COMPANY. THERE CAN BE NO ASSURANCE THAT ANY OF THE SECURITIES WILL BE SOLD.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES AGENCY, NOR HAS ANY SUCH REGULATORY BODY REVIEWED THIS PRIVATE OFFERING MEMORANDUM FOR ACCURACY OR COMPLETENESS. BECAUSE THESE SECURITIES HAVE NOT BEEN SO REGISTERED, THERE MAY BE RESTRICTIONS ON THEIR TRANSFERABILITY OR RESALE BY AN INVESTOR.
EACH PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT HE MUST BEAR THE ECONOMIC RISKS OF THE INVESTMENT FOR AN INDEFINITE PERIOD, SINCE THE SECURITIES MAY NOT BE SOLD UNLESS, AMONG OTHER THINGS, THEY ARE SUBSEQUENTLY REGISTERED UNDER THE APPLICABLE SECURITIES ACTS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THERE IS NO TRADING MARKET FOR THE COMPANY’S MEMBERSHIP UNITS AND THERE CAN BE NO ASSURANCE THAT ANY MARKET WILL DEVELOP IN THE FUTURE OR THAT THE UNITS WILL BE ACCEPTED FOR INCLUSION ON NASDAQ OR ANY OTHER TRADING EXCHANGE AT ANY TIME IN THE FUTURE.
THE COMPANY IS NOT OBLIGATED TO REGISTER FOR SALE UNDER EITHER FEDERAL OR STATE SECURITIES LAWS THE UNITS PURCHASED PURSUANT HERETO, AND THE ISSUANCE OF THE UNITS IS BEING UNDERTAKEN PURSUANT REGULATION CF (CROWD FUNDING) UNDER THE SECURITIES ACT.
ACCORDINGLY, THE SALE, TRANSFER, OR OTHER DISPOSITION OF ANY OF THE UNITS, WHICH ARE PURCHASED PURSUANT HERETO, MAY BE RESTRICTED BY APPLICABLE FEDERAL OR STATE SECURITIES LAWS (DEPENDING ON THE RESIDENCY OF THE INVESTOR) AND BY THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT REFERRED TO HEREIN. THE OFFERING PRICE OF THE SECURITIES HAS BEEN ARBITRARILY ESTABLISHED BY THE COMPANY AND DOES NOT NECESSARILY BEAR ANY SPECIFIC RELATION TO THE ASSETS, BOOK VALUE OR POTENTIAL EARNINGS OF THE COMPANY OR ANY OTHER RECOGNIZED CRITERIA OF VALUE.
MANDATORY SEC LEGENDS REGULATION C
(a) An issuer filing this Form for an offering in reliance on Section 4(a)(6) of the Securities Act and pursuant to Regulation Crowdfunding (§ 227.100 et seq.) must include the following legends:
A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.
In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document.
The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.
These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.
(b) An issuer filing this Form for an offering in reliance on Section 4(a)(6) of the Securities Act and pursuant to Regulation Crowdfunding (§ 227.100 et seq.) must disclose in the offering statement that it will file a report with the Commission annually and post the report on its website, no later than 120 days after the end of each fiscal year covered by the report. The issuer must also disclose how an issuer may terminate its reporting obligations in the future in accordance with Rule 202(b) of Regulation Crowdfunding (§ 227.202(b)).
INTRODUCTION TO OUR COMPANY
QUILA MARIA'S MARGARITAS, LLC
Quila Maria's Margaritas, LLC (the "Company") was organized to produce and bottle Quila Maria's brand margaritas and tequila. Initially, the Company will contract for the bottling of the margaritas in Florida, the initial and primary market for our margaritas.
The Company was organized in August, 2015, by seasoned tequila and margarita professionals, who have thirty-seven years combined experience in the industry. See "Our Managers."
The Company is offering 1,000,000 Class A Membership Units at $1.00 per Unit with a minimum purchase of 350 Units. The Company reserves the right to offer less than the minimum requirement in some circumstances and only Qualified Investors will be accepted as Unit purchasers as defined by Rule 506 (C) of the Securities Exchange Commission.
THE OFFERING SUMMARY
The Company is offering a maximum of 1,000,000 Class A Preferred Membership Units at a price of $1.00 per Unit, $.001 par value per unit. Upon completion of the Offering up to 1,000,000 Class A Preferred Membership Units will be issued.
Proceeds from the sale of Units will be used for: purchase inventory, new product development, advertising and marketing, and working capital. See “USE OF PROCEEDS” in Private Placement Memorandum.
The Class A Preferred Units sold through this Offering shall be provided a seven percent (7%) non-compounding cumulative Preferred Return Distribution (the “Preferred Return”) paid annually each fiscal year. Distribution of the Preferred Return will be subject to the financial performance of the Company and Management approval. The Class A Membership Units shall also participate in a pro-rata percentage of any additional net income approved for distribution to Members.
Assuming maximum proceeds are raised through this Offering, the Class A Unitholders would participate in thirty-three percent (33%) of any additional net income generated by the Company whether derived from net operating profit or from capital gains from the sale of assets.
Each purchaser must execute a Subscription Agreement making certain representations and warranties to the Company, including such purchaser’s qualifications as defined by the Securities and Exchange Commission in Rule Regulation CF promulgated. See “REQUIREMENTS FOR PURCHASERS” in Private Placement Memorandum.
SUMMARY OF PROPOSED OPERATIONS
The Company was formed on August 2, 2015, and has limited operations. Initial operations of the Company have been to secure the proper license, contracts, formula and label approvals, and trademarks for our margaritas and tequila. The Company retained legal council in Mexico to assist in our efforts with the necessary and prerequisite documents to enable the Company to produce and bottle our brand, Quila Maria's, in Mexico and the United States.
The Company has executed a contract with a third-party tequila ria, a distillery of tequila, in Amatitan, Mexico and has begun the initial process of registering our tequila labels with the Consejo Regulador del Tequila (CRT), in Guadalajara, and with the Tax & Trade Bureau, (TTB,) the regulatory agency in the United States.
Once final labels are approved by the CRT, the Company will file for label approval for its tequila. The Company will bottle three styles of tequila, Blanco, Reposado, and Anejo, in 750 ml bottles, and import the tequila into the United States. The Company has initially established suggested target retail prices for Quila Maria's Tequila at $24.95, Blanco, $29.95 Reposado, and $34.95 Anejo.
The Company will initially produce and bottle 1,000 cases, 6,000 bottles of tequila and import into the United States via Miami, Florida.
Additionally, the Company has contracted with a bottler in Florida for the initial production of Quila Maria's Margaritas. Our first production will be 1,000 cases, 12,000 bottles, in a 750 ml bottle with a suggested retail price of $9.99. The Company's low alcohol volume of the margaritas, will allow retailers in Florida, i.e., supermarkets, convenience stores, pharmacies and small locally owned Mexican restaurants to sell and serve real and authentic margaritas.
This concept will allow Publix Supermarkets, CVS, and Walgreens, who have a combined total store count of approximately 3,000, to sell the margaritas. Such giant retailers customer traffic dwarfs small independent liquor stores, a typical supermarket have thousands of customers per day, while a small liquor store next door may only have 50-100 customers per day. Our tequila will have to be sold by the liquor stores, our margaritas can be sold in both the supermarket and small liquor stores.
The Company is managed by seasoned tequila professionals, aficionados and entrepreneurs. They have thirty-seven combined years experience in the distilling, bottling, importing and sales of tequila and margaritas.
JESSE LEE CARRIGAN
Mr. Carrigan was co-founder of Blue Head Tequila ("Blue Head") and it's Managing Member from it's inception in 2005. He was responsible for all aspects of Blue Head development, including regulatory approvals, label and bottle designs, and importing into the United States. He also was responsible for the appointment of distributors and instrumental in selling to the retail trade.
Blue Head experienced solid and continued growth in sales of tequila and margaritas attaining equivalent cases sold of 6,500 in 2014. Blue Head had distribution in seven states, including California, Florida, Tennessee, South Carolina, Arkansas, North Carolina and Oregon. Blue Head Tequila and margaritas were available in Publix Liquor stores and Total Wine in Florida as well as many independent liquor stores.
Blue Head Tequila won many national and international awards. In 2008, Blue Head Tequila won "Double Gold" medals at the prestigious San Francisco World Spirits Competition for all three styles of tequila, Blanco, Reposado, and Anejo. At the time of the awards, no other liquor in the history of the competition had ever won all three awards. The "Double Gold" medal is reserved for those liquors who receive a unanimous vote of all twenty-four judges on the exclusive panel of liquor professionals. To our Managers knowledge, no other liquor has accomplished this feat since.
JOSE LEONARDO LOPEZ
Mr. Lopez was co-founder and namesake of Blue Head Tequila. Mr. Lopez is considered one of the pure tequila aficionados by those who know him in Guadalajara. Knowledgeable in all aspects of the tequila industry, he is recognized as an "expert" in the growing and harvesting of the blue agave plant and the fermentation and distilling of the agave juice.
It is to his credit that Blue Head Tequila attained international recognition of its quality and was recognized by the International Wine & Spirit Competiotion in London, England as the "Best in Show" in 2009 and the Double Gold medal at the same competion in Edinburgh, Scottland in 2010.
Mr. Lopez' expertise also includes the manufacture of filling machines, bottle washers, label machines, shrink tunnels as well as applying the perfect amount of charring of tequila barrels. Additionally, he is an excellent manager of employees who assist him with the distilling and bottling of tequila and margaritas.
Mr. Lopez is a proud member and decendant of the mighty Purepacha Tribe in the central Mexico state of Michocan and is knows affectionately of the moniker, "the Chief." Mr. Carrigan gave him the name the evening of their first encounter in Mexico. Mr. Lopez was dressed in his native tribe attire which included the necessity of Mr. Lopez' face and head being painted "blue."
BLUE HEAD TEQUILA
In August, 2015, the third member and co-founder of Blue Head Tequila died after a brief illness. He was the financial partner of Blue Head and shortly after his passing, his estate and corporation were placed in bankruptcy protection.
Consequently, the bankruptcy trustee stopped all development and sales of Blue Head Tequila and margaritas and any further infusion of needed capital. Blue Head suffered the loss of inventory which was bottled and in warehousing in Mexico and Laredo, Texas. Orders from distributors were unable to be filled and retail shelves began to deplete of Blue Head products.
Mr. Carrigan and Mr. Lopez remain members of Blue Head and Mr. Carrigan serves as the Managing Member. Additionally, Cindi Buckingham, an Advisor to the Company, is related by marriage to the deceased member. Although administratively dissolved, Blue Head could become a valuable brand and worthy of acquisition at some time in the future. However, the Company has no plans of such action at this time; however, should the opportunity arise in the future, Blue Head could become a worthy brand for possible acquisition of the Company.
It is the belief of the managers and Advisory Board of the Company, that no material conflict of interest exist between the Company management and Blue Head. See "Certain Transactions" in PPM.
SO MUCH MORE THAN WHAT YOU SEE
BEFORE YOU INVEST
BEFORE YOU INVEST
Quila Maria's Margaritas, LLC 506(c) Investor Portal provides the capability for prospective accredited investors to become approved as a “prospect", review accreditation requirements, request delivery of the Private Placement Memorandum (“PPM”) with multiple delivery options (print, electronic, flip book), access management contact information, and view the Company’s SEC Form C filing.
For the Company’s management team, this allows for controlled access to the PPM with the prospect providing contact information and, after approval, being added to the investor prospect database which provides management an effective tool for investor prospect relations and management.
AFTER YOU INVEST
Once a prospective investor has decided they are interested in investing Quila Maria's Margaritas, the management team can then upgrade the prospect account to “Investor” level access. This access now provides the capability for investors to download subscription documents, specific process information for investing and instructions on transfer of investment funds, investor relations contact information, and the ability to see in real time statistics on the offering.
Investor level access also includes access to an investor relations module that provides Investors the capability to access updates from management, quarterly and annual reports, operations or project updates from the Company, press releases, and Company financials. The portal’s mobile “app” type interface will allow the Company’s management team to review and approve upgrading prospects to “Investor” status from mobile devices in real time.
READY TO LEARN MORE ABOUT QUILA MARIA'S ?