- 70% sales growth from Jan-Jun 2016 to Jan-Jun 2017
- 4.8 star (out of 5) average customer review (610+ reviews)
- Strategic investor, Rastelli Foods Group, provides scalable infrastructure and costs
- Sustainable, positive gross margins
- Also available on premier sites like Williams-Sonoma.com
- Amount raised:
- Series A :
- Minimum Investment: US $500 per investor
- : Preferred Equity
- US $6,000,000 :
- Side by Side Offering
Greensbury Market is an e-commerce company dedicated to selling organic grass-fed grass-finished beef, organic poultry, antibiotic-free pork and wild or sustainably caught seafood delivered direct to consumers. We ship to all 48 states in the continental US and use packaging that retains the freshness and nutritional quality of the products and lasts in the freezer for up to 12 months, eliminating food waste. And our individual portion sizing and packaging allows our customers to use only what they want, when they want, eliminating food waste.
We demonstrate our commitment to customer service and satisfaction with a 100% satisfaction guarantee and our customer ratings speak for themselves -- an average of 4.8 out of 5 stars from over 600 customer reviews. We have over 21k followers on social media and combined with an active email database of nearly 30k, we have direct access to a large and growing customer base. Our 71 Net Promoter score is 32 points higher than the averages for both the Grocery and Online Shopping sectors.
Join us on Thursday, October 26th at 2:00pm ET to see Greensbury Market talk about their product and answer your questions: https://attendee.gotowebinar.com/register/4441004816387859713
Tune-in on Thursday, November 9th at 9:00am ET to see Greensbury Market pitch live to a group of east coast investors.
Registration URL: https://attendee.gotowebinar.com/register/2932007570419631106
Webinar ID: 626-585-291
Product quality and convenience are two main reasons customers choose Greensbury. Most of our customers are busy professionals in urban areas who are willing to pay a premium for top quality proteins and value the convenience of online shopping, home delivery and our frozen packaging which makes it easy for them to use only what they want, when they want, eliminating food waste. Our pricing is comparable to what customers would pay for similar quality products from other retailers (both online and offline) and with free shipping incentives, rotating pricing promotions and seasonal special offers our customers know they are paying a competitive price for high quality proteins. Encouraged by our success on Williams-Sonoma.com and other online markets, in our next phase of growth over the next 12-18 months, we will focus on expanding our brand into even more distribution channels.
Greensbury customers can order products a la carte, schedule recurring deliveries (at a 5% discount and on a timeline they select), set delayed deliveries and send gifts to their friends/families/coworkers. We also offer a full breadth of healthy, high-quality proteins including beef, chicken, pork, turkey, lamb, salmon, halibut, cod, tuna, scallops, lobster, and shrimp.
In addition to competitive pricing and the convenience of online shopping and home delivery, Greensbury is different from most other companies in the choice we offer our customers. Greensbury offers a wide range of high quality protein including beef, chicken, pork, fin-fish and shellfish. Many other online companies offer fewer protein types or give customers very little choice in what is included in their orders.
Our a la carte business model is unique in our category as well. While we do offer recurring, subscription, ordering we find that most of customers prefer to buy on an as needed basis and our strong return customer rate is evidence that our customers are loyal to Greensbury. Many of the companies with subscription only business models struggle with incredibly low customer retention.
Real food should be more accessible, because when we dine well we live well. This is Greensbury's guiding principle.
Traveling through California in the late 2000s, Greensbury founder Todd Horowitz discovered a small, family owned farm and purchased his first grass-fed steak. That evening he cooked that steak side-by-side with a grain-fed steak, and paying close attention to each, he was struck by the stark contrast in the taste and health benefits between grass-fed and conventional, grain fed beef. And that is how Greensbury was born.
Today, we offer a wide range of high quality, healthy meats and seafood but our focus remains the same: to provide customers with the choice, quality and convenience to make healthy, satisfying meals. Our product quality, and the customer reviews, speak for themselves: all our meats are from American farms, our beef is 100% organic grass-fed grass-finished and we sell 100% organic chicken; all of our seafood is caught using sustainable methods.
Thanks to our strategic equity partnership with one of the country’s largest suppliers, Greensbury benefits from an economies of scale typically not attainable for start-up companies. Because our operating margins are sustainable and we don't need to make large CAPEX investments as we scale, we can focus our efforts on growing our customer base and providing great customer service.
A Side by Side offering refers to a deal that is raising capital under two offering types. If you plan on investing less than US $20,000.00, you will automatically invest under the Regulation CF offering type. If you invest more than US $20,000.00, you must be an accredited investor and invest under the Regulation D offering type.
|Terms & Description|
|Investor Types||Accredited Only||Accredited and Non-accredited|
|Series A||Series A|
|Round size||US $2,000,000||US $2,000,000|
|US $125,017||US $15,731|
|Minimum investment||$20,000||US $500|
|US $400,000||US $400,000|
|CF Offering Cap||While Greensbury is offering up to $2,000,000 worth of securities in its Series A, only up to $1,070,000 of that amount may be raised through Regulation CF.||While Greensbury is offering up to $2,000,000 worth of securities in its Series A, only up to $1,070,000 of that amount may be raised through Regulation CF.|
|US $6,000,000||US $6,000,000|
|Security Type||Preferred Equity||Preferred Equity|
|Investment Management Agreement||All non-Major Purchasers will be subject to an Investment Management Agreement (“IMA”). The IMA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IMA included with Greensbury's offering materials for additional details.||All non-Major Purchasers will be subject to an Investment Management Agreement (“IMA”). The IMA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IMA included with Greensbury's offering materials for additional details.|
|Closing Terms||The Company is making concurrent offerings under both Regulation CF and Regulation D (the "Combined Offerings"). Unless the Company raises at least the Target Amount of $25,000 under the Regulation CF offering and a total of $400,000 under the Combined Offerings (the “Closing Amount”) by November 17, 2017 of the campaign no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.||The Company is making concurrent offerings under both Regulation CF and Regulation D (the "Combined Offerings"). Unless the Company raises at least the Target Amount of $25,000 under the Regulation CF offering and a total of $400,000 under the Combined Offerings (the “Closing Amount”) by November 17, 2017 of the campaign no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.|
- $500+: 8" Carving Knife
- $1,000+: All of the above plus 6 Piece Steak Knife Set
- $2,500+: All of the above plus 10% lifetime discount
- $5,000+: All of the above plus 15% lifetime discount
- $10,000+: All of the above plus free shipping for life
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
Capitalization And Ownership
The Company has issued the following outstanding Securities:
The Company has authorized 446,000 shares of $0.001 par value common stock and 194,000 shares of $0.001 par value preferred stock, of which 80,500 are designated Series Seed Preferred Stock and 113,500 are designated Series A Preferred Stock (assuming a December 1, 2017 first close date). As of December 31, 2016 and 2015, 120,179 and 120,179 shares of common stock, respectively and 76,931 and 63,562 shares of Series Seed Preferred Stock were issued and outstanding, all respectively. No shares of Series A Preferred Stock have yet been issued.
Series Seed Preferred Stock have certain non-cumulative dividend rights over common stock, are optionally convertible into common stock with dilution protections on the conversion rate, are mandatorily convertible to common stock upon an initial public offering, contain other protective provisions, and have voting rights commensurate with common stockholders. The Series Seed Preferred Stock has liquidation preferences over preferred stock at $16.83 per share, providing total liquidation preferences of $1,294,749 and $1,069,748 as of December 31, 2016 and 2015, respectively.
During 2013, the Company converted its LLC membership interests to the Company’s common stock, resulting in the issuance of 135,295 shares of common stock.
In 2014, the Company issued a total of 46,270 shares of common stock at prices per share of $11.96-$16.67 per share, for total proceeds of $700,000. These stock purchase agreements contained contractual liquidation preferences that provide for a preference over other equity holders equal to the purchase amount in the event of a liquidation event. These liquidation preferences remain in place until a qualified financing where the Company issues equity for proceeds of $1,500,000 or greater at a valuation of $3,300,000-$4,250,000 or greater (varies by agreement). Additionally, these shareholders are provided dilution protections providing for the issuance of additional shares without further consideration upon an equity financing transaction at a valuation of $3,300,000 or less up until a qualified financing where the Company issues equity for proceeds of $1,500,000 or greater at a valuation of $3,300,000 or greater. These shares are also provided with preemptive rights to purchase shares in future equity financing events. All but 6,000 of these shares of common stock were exchanged for an equal number of Series Seed Preferred Stock during 2015. Accordingly, the liquidation preferences and other rights on the converted shares were converted to the rights and preferences of the Series Seed Preferred Stock. The liquidation preferences on the remaining 6,000 shares were $100,000 and $100,000 as of December 31, 2016 and 2015, respectively.
In 2015, three stockholders agreed to surrender a portion of their shares of common stock, resulting in the surrender of 73,171 shares of common stock back to the Company for no consideration.
As discussed in Note 4 in the Reviewed Financials in Exhibit B, the Company issued 60,510 shares of common stock in 2015 in connection with a collaboration agreement. These shares were valued by the Company at $112,500 and were accordingly recorded as paid-in capital in consideration for entering into this agreement.
In 2015 and 2016, the Company issued its preferred stock at price per share of $16.83. In 2015, 48,725 shares of common stock were exchanged for an equal number of Series Seed Preferred Stock, the Company issued 2,970 shares of Series Seed Preferred Stock for $50,000 cash, and converted principal and accrued interest totaling $144,844 on outstanding notes payable to Series Seed Preferred Stock at 20%-40% discounts to the preferred stock pricing, resulting in the issuance of 11,867 shares of Series Seed Preferred Stock. In 2016, the Company issued 13,369 shares of preferred stock for total proceeds of $225,000.
In March 29, 2017, the Company issued $50,000 convertible promissory notes to three investors for total financing of $150,000. The convertible promissory notes bear interest at 5% and will be due and payable by the Company on demand by the Lender at any time after the earlier of: (i) March 24, 2018 or, (ii) the closing of the Next Equity Financing. The notes are convertible into the Company’s equity upon the next equity financing transaction at a price per share determined by the lesser of a 20% discount to the share pricing in the triggering equity financing or the price per share determined by a $10,000,000 pre-money valuation on the Company’s fully diluted capitalization. The notes are also convertible to the Company’s equity at a price per share determined by a $10,000,000 pre-money valuation on the Company’s fully diluted capitalization if and upon a corporate transaction (as defined in the note agreements) or upon maturity.
The Company’s founder and a board member had extended financing through the issuance of notes payable of $25,000 in 2015 and $47,452 in 2014. Additionally, the Company’s founder advanced the Company $5,000 during 2015 which was repaid without interest in 2016. These notes payable are repayable upon demand, or upon a liquidation event, change in control, or default under the terms of the agreement, and accordingly the Company has classified these notes payable as current liabilities as of each December 31, 2016 and 2015. The $25,000 note bears interest at 12% and the $47,452 note bears interest at 5%. The $25,000 note provides the noteholder a senior secured credit interest in the Company and is collateralized by all assets of the Company. Interest expense of $5,365 and $3,938 was recorded for these notes during the years ended December 31, 2016 and 2015, respectively. No interest payments have been made to date and the accrued interest on these notes amounted to $9,302 and $3,938 as of December 31, 2016 and 2015, respectively.
The Company pays rent to an entity managed by a board member at a rate of $2,000 per month under an informal month-to-month arrangement since August 2015. Total expenses recorded under this arrangement for the years ended December 31, 2016 and 2015 were $24,000 and $10,000, respectively. Of these costs, $30,000 and $10,000 remained outstanding and payable as of December 31, 2016 and 2015, respectively.
The Company has deferred compensation to the CEO and CFO as needed to support cash flow needs throughout 2015 and 2016. As of December 31, 2016 and 2015, deferred compensation to these Company officers was $61,693 and $7,679, respectively.
Please see the financial information listed on the cover page of this Form C and attached hereto in addition to the following information. Financial statements are attached hereto as Exhibit B.
The Company recognizes revenue when: (1) persuasive evidence exists of an arrangement with the customer reflecting the terms and conditions under which products or services will be provided; (2) delivery has occurred or services have been provided; (3) the fee is fixed or determinable; and (4) collection is reasonably assured.
The Company is a business that has not yet generated profits, has sustained net losses of $378,233 and $494,129 during the years ended December 31, 2016 and 2015, respectively, has an accumulated deficit of $1,655,291 as of December 31, 2016, and current liabilities exceed current assets by $333,697 as of December 31, 2016. Costs of goods sold include merchant fees of $16,071 and $10,877 and delivery costs of $97,381 and $76,136 for the years ended December 31, 2016 and 2015, all respectively.
The Company’s ability to continue as a going concern in the next twelve months following the date the financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and plans to generate revenues and raise capital as needed to satisfy its capital needs. No assurance can be given that the Company will be successful in these efforts.
These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities.
In February 2015, the Company entered into a collaboration agreement with a supplier and distributor of product whereby the counterparty will source product for the Company to sell and distribute such product to the Company’s customers (the “Collaboration Agreement”). The agreement is for an initial term of three years, and contains an automatic renewal option for additional one-year terms until terminated under the terms of the agreement. The agreement provides the Company with pricing of the counterparty’s costs plus 10%, and provides for a 50% split of commission on profits from business customers brought to the counterparty by the Company. The Company issued 60,510 shares of its common stock to the counterparty as part of this agreement, providing the counterparty with 25% of the Company’s outstanding equity, with certain dilution protections and rights to maintain ownership percentage through purchase of future offerings at issuance pricing.
Under the agreement terms, the counterparty also received an option to purchase an additional 20% of the Company’s equity at $10M valuation or 10 times EBITDA from prior 3 months, times 4. This purchase option expired 12/31/15 without being exercised.
The Company currently requires an average of $45,000 per month to sustain operations. The Company anticipates to increase the burn rate to $60,000 after the raise. The Company expects monthly burn will steadily increase month over month, as the company spends more funds on customer acquisition. The Company expects December 2018 cash burn will be approximately $150,000 and December 2019 approximately $250,000.
Liquidity and Capital Resources
The Company is dependent upon additional capital resources for its planned full scale operations and is subject to significant risks and uncertainties; including failing to secure funding to continue to operationalize the Company’s plans or failing to profitably operate the business.
The Company does not have any additional sources of capital other than the proceeds from the Offering.
Capital Expenditures and Other Obligations
The Company does not intend to make any material capital expenditures in the future.
Material Changes and Other Information
Trends and Uncertainties
After reviewing the above discussion of the steps the Company intends to take, potential Purchasers should consider whether achievement of each step within the estimated time frame is realistic in their judgment. Potential Purchasers should also assess the consequences to the Company of any delays in taking these steps and whether the Company will need additional financing to accomplish them.
The financial statements are an important part of this Form C and should be reviewed in their entirety. The financial statements of the Company are attached hereto as Exhibit B.
Based on the Offering price of the Securities, the pre-Offering value ascribed to the Company is $6,000,000
Before making an investment decision, you should carefully consider this valuation and the factors used to reach such valuation. Such valuation may not be accurate and you are encouraged to determine your own independent value of the Company prior to investing.
As discussed in "Dilution" below, the valuation will determine the amount by which the investor’s stake is diluted immediately upon investment. An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their "sweat equity" into the Company. When the Company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is immediately diluted because each share of the same type is worth the same amount, and you paid more for your shares (or the notes convertible into shares) than earlier investors did for theirs.
There are several ways to value a company, and none of them is perfect and all of them involve a certain amount of guesswork. The same method can produce a different valuation if used by a different person.
Liquidation Value — The amount for which the assets of the Company can be sold, minus the liabilities owed, e.g., the assets of a bakery include the cake mixers, ingredients, baking tins, etc. The liabilities of a bakery include the cost of rent or mortgage on the bakery. However, this value does not reflect the potential value of a business, e.g. the value of the secret recipe. The value for most startups lies in their potential, as many early stage companies do not have many assets (they probably need to raise funds through a securities offering in order to purchase some equipment).
Book Value — This is based on analysis of the Company’s financial statements, usually looking at the Company’s balance sheet as prepared by its accountants. However, the balance sheet only looks at costs (i.e. what was paid for the asset), and does not consider whether the asset has increased in value over time. In addition, some intangible assets, such as patents, trademarks or trade names, are very valuable but are not usually represented at their market value on the balance sheet.
Earnings Approach — This is based on what the investor will pay (the present value) for what the investor expects to obtain in the future (the future return), taking into account inflation, the lost opportunity to participate in other investments, the risk of not receiving the return. However, predictions of the future are uncertain and valuation of future returns is a best guess.
Different methods of valuation produce a different answer as to what your investment is worth. Typically liquidation value and book value will produce a lower valuation than the earnings approach. However, the earnings approach is also most likely to be risky as it is based on many assumptions about the future, while the liquidation value and book value are much more conservative.
Future investors (including people seeking to acquire the Company) may value the Company differently. They may use a different valuation method, or different assumptions about the Company’s business and its market. Different valuations may mean that the value assigned to your investment changes. It frequently happens that when a large institutional investor such as a venture capitalist makes an investment in a company, it values the Company at a lower price than the initial investors did. If this happens, the value of the investment will go down.
The online grocery market in the US is growing over 20% annually and is expected to top $26B by 2020 while grocery sales of organic meat and poultry are growing even faster at over 30% annually. In addition 25% of US consumers are willing to pay a premium for natural, organic, sustainably sourced products. Millennials, who will be the largest working generation within the next 5 years, are a big driver of these trends and are 2x more likely than older generations to seek out organic, "free-from" ingredients; and Millennials are more willing than prior generations to pay a higher share of income for premium foods.
Over the last few years, there has been a resurgence in home cooking and today 80% of Americans cook "from scratch" at home a few times each week or more. At the same time, these home cooks are choosing "microbrands" like Greensbury that match their values. Large CPG companies have noticed these trends as well as they are losing market share to , as well as investing in, small, authentic specialty brands.
Risks Related to the Company’s Business and Industry
Our operations and revenue experience some seasonality in that the early summer and holiday months tend to have increased sales. Quarterly results may vary and are not necessarily an indication of future performance. The seasonality of Greensbury’s revenue and operations could exacerbate fluctuations due to other factors, including costs of expansion, upgrades to systems and infrastructure, or changes in business or macroeconomic conditions.
We may face unexpected difficulties in setting up its West Coast facilities. The Company may be unable to find a partnership as advantageous as that with Rastelli and setbacks in that expansion may result in lower revenue growth and higher shipping costs than anticipated.
The Company has a large amount of high-interest credit-card debt. As of August 31, 2017, Greensbury had $81,657 in credit card debt. The Company plans to use capital raised from this round to pay it off, reducing the amount of capital that Greensbury can allocate towards customer acquisition and growth.
The Company has two long term outstanding loans from Bradley Harrison and Matt Kole. These long-term liabilities come to $72,452 with annual interest rates of 12% for Bradley Harrison’s loan and 5% for Matt Kole’s loan. Repayment of the former will commence upon the Company reaching profitability and the latter will be paid back upon an exit.
Greensbury faces competition from other companies in the food delivery space. We compete against traditional Grocery Stores such as Whole Foods and The Fresh Market, as well as newer companies like Blue Apron and Butcher Box. Many of our competitors have significantly greater financial, technical and human resources than we have and superior expertise in research and development and marketing approved services and thus may be better equipped than us to develop and commercialize services.
We are substantially dependent on our collaboration agreement with Rastelli Food Groups.Per the agreement, Rastelli will source product and fulfill Greensbury orders in exchange for equity in Greensbury and other consideration. The termination of, or material changes to, our relationships with Rastelli or the inability of Rastelli to fulfill our orders, would adversely affect our ability to make timely deliveries of our product and would have a material adverse effect on our business.
We may fail to maintain food safety throughout the supply chain and food-borne illness incidents may materially adversely affect our business.There are many factors that may influence the safe packaging, delivery, handling, storage, cooking, or consumption of these foods. Selling perishable meats, poultry, and seafood products online involves inherent legal and other risks, and there is increasing governmental scrutiny of and public awareness regarding food safety. Unexpected side effects, illness, injury or death related to allergens, food-borne illnesses or other food safety incidents could expose us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings.
Quality management plays an essential role in determining and meeting customer requirements, preventing defects, improving the Company’s products and services and maintaining the integrity of the data that supports the safety and efficacy of our products. Our future success depends on our ability to maintain and continuously improve our quality management program. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products. In addition, a successful claim brought against us in excess of available insurance or not covered by indemnification agreements, or any claim that results in significant adverse publicity against us, could have an adverse effect on our business and our reputation.
One of the potential risks we face in the distribution of our products is liability resulting from counterfeit or tainted products infiltrating the supply chain.Because we source ingredients from various sources, we rely on various suppliers and their quality control measures. While we have procedures to maintain the highest quality levels in our products, we may be subject to faulty, spoiled or tainted ingredients or components in our products, which would negatively affect our products and our customers’ experience with them and could decrease customer demand for our products.
Our business is substantially dependent upon awareness and market acceptance of our products and brands.Our business depends on acceptance by our consumers. Accordingly, any failure of our brands to maintain or increase acceptance or market penetration would likely have a material adverse effect on our revenues and financial results.
The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees. In particular, the Company is dependent on Ted Hopper, and Mrinali Vaswani who are CEO and CFO & COO of the Company respectively. The Company has entered into an employment agreement with Ted Hopper, but currently only has a contracting agreement with Mrinali Vaswani. There can be no assurance that they will continue to be employed by the Company for a particular period of time. The loss of our key employees or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.
The amount of capital the Company is attempting to raise in this Offering may not be enough to sustain the Company’s current business plan. In order to achieve the Company’s near and long-term goals, the Company will need to procure funds greater than the Target offering amount. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital, we will not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
Failure by our transportation providers to deliver our products on time or at all could result in lost sales. We currently rely upon third-party transportation providers for a significant portion of our product shipments. Our utilization of delivery services for shipments is subject to risks, including increases in fuel prices, which would increase our shipping costs, and employee strikes and inclement weather, which may impact the ability of providers to provide delivery services that adequately meet our shipping needs.
We are not subject to Sarbanes-Oxley regulations and lack the financial controls and safeguards required of public companies. We do not have the internal infrastructure necessary and are not required, to complete an attestation about our financial controls that would be required under Section 404 of the Sarbanes-Oxley Act of 2002. There can be no assurance that there are no significant deficiencies or material weaknesses in the quality of our financial controls. We expect to incur additional expenses and diversion of management’s time if and when it becomes necessary to perform the system and process evaluation, testing and remediation required in order to comply with the management certification and auditor attestation requirements.
Board Meeting Minutes has not always been well-documented. Board meeting minutes serve as an official and legal record of the meeting of the Board of Directors. Proper corporate government typically requires that all appointments of board members, approval of capital raising and approval of major decisions were done in accordance with state law and the company’s bylaws. Board meeting minutes should serve as an evidence of the above.
The company has not yet filed a Form D for its series seed offering. SEC rules require this notice to be filed by companies within 15 days after the first sale of securities in the offering. Failing to register with the SEC or get an exemption may lead to fines, the right of investors to get their investments back, and even criminal charges.
The reviewing CPA has included a “going concern” note in the reviewed financials. The Company did not generate profits, and sustained net losses of $378,233 and $494,129 during the years ended December 31, 2016 and 2015, respectively. According to the reviewing CPA, the Company has an accumulated deficit of $1,655,291 as of December 31, 2016, and current liabilities exceed current assets by $333,697 as of December 31, 2016. Additionally, the ability to continue as a going concern for the next 12 months depends on the company’s ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results. The independent accountant observes that these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The independent accountant further notes that the financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities.
Risks Related to the Securities
The sale of Series A Preferred Stock is subject to approval by a majority of the uninterested Series Seed Preferred Stock Holders. In the Company’s current Charter, the Company may not create or sell the Series A Preferred Stock without the approval of a majority of the holders of Series Seed Preferred Stock. However, because Bradley C. Harrison is a board member of SeedInvest, the Company cannot rely upon his, or his affiliates votes, in determining if the Series Seed Preferred Stock approves of this transaction. The Company has not yet obtained the requisite approvals.
SeedInvest has a potential conflict of interest. Bradley Harrison, a board member of SeedInvest, is also a member of Greensbury’a board. While Brad does not have influence or oversee day-to-day operations, he does have influence over both Greensbury and SeedInvest.
Existing investors have not waived their pre-emptive rights and currently plan on exercising those rights. The pre-emptive right entitles those investors to participate in this securities issuance on a pro rata basis. If those investors choose to exercise their pre-emptive right, it could dilute shareholders in this round. This dilution could reduce the economic value of the investment, the relative ownership resulting from the investment, or both.
The Series A Preferred Stock will not be freely tradable until one year from the initial purchase date. Although the Series A Preferred Stock may be tradable under federal securities law, state securities regulations may apply and each Purchaser should consult with his or her attorney. You should be aware of the long-term nature of this investment. There is not now and likely will not be a public market for the Series A Preferred Stock. Because the Series A Preferred Stock have not been registered under the Securities Act or under the securities laws of any state or non-United States jurisdiction, the Series A Preferred Stock have transfer restrictions and cannot be resold in the United States except pursuant to Rule 501 of Regulation CF. It is not currently contemplated that registration under the Securities Act or other securities laws will be affected. Limitations on the transfer of the Series A Preferred Stock may also adversely affect the price that you might be able to obtain for the Series A Preferred Stock in a private sale. Purchasers should be aware of the long-term nature of their investment in the Company. Each Purchaser in this Offering will be required to represent that it is purchasing the Securities for its own account, for investment purposes and not with a view to resale or distribution thereof.
Your ownership of the shares of preferred stock may be subject to dilution. Non-major purchasers of preferred stock do not have preemptive rights. If the Company conducts subsequent offerings of preferred stock or securities convertible into preferred stock, issues shares pursuant to a compensation or distribution reinvestment plan or otherwise issues additional shares, investors who purchase shares in this offering who do not participate in those other stock issuances will experience dilution in their percentage ownership of the Company’s outstanding shares. Furthermore, shareholders may experience a dilution in the value of their shares depending on the terms and pricing of any future share issuances (including the shares being sold in this offering) and the value of the Company’s assets at the time of issuance.
You will be bound by an investment management agreement, which limits your voting rights. All Non-Major Purchasers of Series A Preferred Stock will be bound by an Investment management agreement. This agreement will limit your voting rights and at a later time may require you to convert your future preferred shares into common shares without your consent. Non-Major Purchasers will be bound by this agreement unless Non-Major Investors holding a majority of the principal amount outstanding of the Series A preferred stock vote to terminate the agreement.
The Securities will be equity interests in the Company and will not constitute indebtedness. The Securities will rank junior to all existing and future indebtedness and other non-equity claims on the Company with respect to assets available to satisfy claims on the Company, including in a liquidation of the Company. Additionally, unlike indebtedness, for which principal and interest would customarily be payable on specified due dates, there will be no specified payments of dividends with respect to the Securities and dividends are payable only if, when and as authorized and declared by the Company and depend on, among other matters, the Company’s historical and projected results of operations, liquidity, cash flows, capital levels, financial condition, debt service requirements and other cash needs, financing covenants, applicable state law, federal and state regulatory prohibitions and other restrictions and any other factors the Company’s board of directors deems relevant at the time. In addition, the terms of the Securities will not limit the amount of debt or other obligations the Company may incur in the future. Accordingly, the Company may incur substantial amounts of additional debt and other obligations that will rank senior to the Securities.
There can be no assurance that we will ever provide liquidity to Purchasers through either a sale of the Company or a registration of the Securities. There can be no assurance that any form of merger, combination, or sale of the Company will take place, or that any merger, combination, or sale would provide liquidity for Purchasers. Furthermore, we may be unable to register the Securities for resale by Purchasers for legal, commercial, regulatory, market-related or other reasons. In the event that we are unable to effect a registration, Purchasers could be unable to sell their Securities unless an exemption from registration is available.
The Company does not anticipate paying any cash dividends for the foreseeable future. The Company currently intends to retain future earnings, if any, for the foreseeable future, to repay indebtedness and to support its business. The Company does not intend in the foreseeable future to pay any dividends to holders of its shares of preferred stock.
Any valuation at this stage is difficult to assess. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
In addition to the risks listed above, businesses are often subject to risks not foreseen or fully appreciated by the management. It is not possible to foresee all risks that may affect us. Moreover, the Company cannot predict whether the Company will successfully effectuate the Company’s current business plan. Each prospective Purchaser is encouraged to carefully analyze the risks and merits of an investment in the Securities and should take into consideration when making such analysis, among other, the Risk Factors discussed above.
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company’s employees, including its management. You should carefully review any disclosure regarding the company’s use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company’s board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Frequently Asked Questions
A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.
The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.
Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.
Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.
Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive shares, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by Greensbury. Once Greensbury accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Greensbury in exchange for your shares. At that point, you will be a proud owner in Greensbury.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or government-issued identification
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.
An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:
- If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
- If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.
Separately, Greensbury has set a minimum investment amount of US $500.
Accredited investors investing $20,000 or over do not have investment limits.
You are a partial owner of the company, you do own shares after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.
In certain circumstances a company may terminate its ongoing reporting requirement if:
- The company becomes a fully-reporting registrant with the SEC
- The company has filed at least one annual report, but has no more than 300 shareholders of record
- The company has filed at least three annual reports, and has no more than $10 million in assets
- The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
- The company ceases to do business
However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.
Currently there is no market or liquidity for these shares. Right now Greensbury does not plan to list these shares on a national exchange or another secondary market. At some point Greensbury may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when Greensbury either lists their shares on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.
This is Greensbury's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the Greensbury's Form C. The Form C includes important details about Greensbury's fundraise that you should review before investing.
For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your shares have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your portfolio page
If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your shares have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.