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Vinovest Bottle & Barrel 1

Fine wine and whiskey: a potentially profitable pairing for your portfolio
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Documents

Republic (OpenDeal Portal LLC, CRD #283874) is hosting this Reg CF securities offering by Bottle and Barrel I LLC, a series of Vinovest Capital, LLC. View the official SEC filing and all updates:
Official SEC Logo Form C SEC.gov
Company documents
Vinovest Bottle & Barrel 1 IPA Bottle and Barrel I LLC Form C.pdf
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Highlights


  • Fine wine & whiskey offer attractive risk/return profiles
  • Tap into a previously inaccessible market with a single investment
  • Access a professionally managed, highly curated, diversified portfolio
  • Powered by Vinovest's team combining sommeliers & data-driven FinTech
  • Exclusively offered via Republic by Vinovest

* Learn how to potentially get paid and make a return in the FAQ below

Investment opportunity


Discover wine & whiskey investing

Pairing fine wine and whiskey with traditional assets like stocks and bonds can add attractive returns and portfolio diversity to your investments, as well as preserve your wealth by potentially making your portfolio more resistant to inflation and recessions.

However, investing in fine wine and whiskey has historically been difficult due to:

  • Extreme difficulty in accessing investment grade wine and whiskey without a deep knowledge of their secondary markets
  • Significant resources are typically required for broker fees and auction house commissions
  • High cost involved in sourcing and managing suitable storage and insurance

Solution


Vinovest:
Your Investment Sommelier

Vinovest is a modern platform handling the end-to-end process of wine & whiskey investing:

  • Sourcing and acquiring investment-grade wines and whiskeys
  • Providing professional custody solutions, storage, and insurance
  • Managing ongoing buying and selling activities

The Vinovest team hails from the investment, technology, and wine industries, and operates from Burgundy vineyards to Silicon Valley to Wall Street.


Characteristics of wine & whiskey investments


Product


Uncorking your portfolio's potential

Bottle & Barrel I LLC, a series of Vinovest Capital, LLC, combines the experience of wine and spirits professionals with quantitative investment analysis.

The portfolio’s primary investment objectives are to generate attractive risk-adjusted returns by investing in physical cases and bottles of fine wines and physical casks of whiskeys.

The portfolio utilizes Vinovest’s capabilities and expertise from purchase to sale of each bottle and cask, to seek to achieve the high appreciation potential of fine wine and whiskey.


Investment strategy overview


Vinovest manages portfolios to deliver their investment objectives through a combination of strategies:

Customers


A global network of wine & whiskey lovers and experts

Vinovest’s clients comprise many investor types looking to invest in alternative asset classes. We’ve created a global network of wine & whiskey lovers and experts. 

Business model


Wine & whiskey investing for you, personalized by experts


Wine investment strategy


Vinovest seeks to achieve wine's high appreciation potential from purchase to sale of each bottle.

Vinovest sources wines directly from wineries, global wine exchanges, and merchants, and uses its network of relationships to strive to acquire wines at the best market value possible.

Vinovest’s proprietary algorithm analyzes wine market data from a variety of sources on a number of factors, including critic score, varietal, production year or historical pricing.


Whiskey investment strategy


Whiskey investing happens in three stages: investing, aging, and selling.



Investing in Casks
We only invest in whole casks, because unlike wine, whiskey stops maturing and enhancing its flavor and quality once it is removed from the cask. This arrested development limits bottled whiskey’s potential return on investment.

Aging the Casks
The Fund’s casks remain at the distillery or at a bonded warehouse while aging. A few things happen to whiskey while it ages: 1) it decreases in volume due to evaporation; 2) it loses alcoholic strength; 3) it develops more flavor.

Selling the Casks
We expect to hold casks for at least five years. When the time is right, there are a number of potential selling options such as selling at auctions, selling to a distillery or independent bottler or selling to a private collector.

Market


Bottle your wealth


Investing in wine


Several factors drive wine prices over time.

Scarcity
Wineries often produce investment grade wine in limited quantities.These wines are already in high demand so low supply only enhances this.

Aging
The drinking quality of investment grade wine generally improves as it ages, when it is stored properly.

Brand Equity
Some of the most prestigious wines in the world can command six-figure prices for a single bottle.

Fine Wine has demonstrated consistent and stable returns over the last 18+ years

Hedge against recessions
During the 2008/2009 recession, when the S&P 500 plunged almost 50%, fine wine actually grew 29%.



Investing in whiskey


Whiskey has the potential to increase exponentially in value. We reference the Rare Whiskey Icon 100 Index – an index comprised of the top 100 traded whisky bottles. It offers valuable insights into market trends and certain future cask values.


Fine whisky has outperformed mainstream assets since 2008

Competition


Exclusively offered via Republic by Vinovest

Vinovest is pleased to offer an exclusive offering via Republic providing access to fine wine and whiskey with a single investment.

Vision and strategy


Democratizing investment in fine wine & whiskey

Vinovest believes that adding alternative assets, like fine wine and whiskey, to investment portfolios of primarily traditional assets, like stocks and bonds, can help investors reduce portfolio volatility and downside risk, thereby increasing risk-adjusted returns.

Bottle & Barrel I LLC offers a way for investors to access wine and whiskey investment opportunities.  

At Vinovest, our mission is to help investors enjoy the profits of investing in fine wine and whiskey as an asset class, while we take care of the selection headaches, inventory management, and authenticity verification.

Funding


VC backers and sponsors




Sponsors at:


Founders


Meet the founders

Anthony Zhang

  • Previously founded 2 companies (both acquired)

  • Formerly Head of Marketing and Business Development at Blockfolio (acquired)

  • Thiel Fellow


Brent Akamine

  • Founding team member at Flipagram (raised $70M led by Sequoia and then acquired by Bytedance)
  • Led redesign of US launch of TikTok
  • Formerly Director of Design at Blockfolio (acquired)

Deal terms


Minimum investment

$500

The smallest investment amount that Vinovest Bottle & Barrel 1 is accepting.
Learn more

Maximum investment

$500,000

The largest investment amount that Vinovest Bottle & Barrel 1 is accepting.
Learn more

Funding goal

$5M

Vinovest Bottle & Barrel 1 must achieve its minimum goal of $25K before the deadline. The maximum amount the offering can raise is $5M.
Learn more

Deadline
Vinovest Bottle & Barrel 1 needs to reach their minimum funding goal before the deadline ( ). If they don’t, all investments will be refunded.
Learn more
Type of security

Crowd IPA

Crowd IPA (Interests Purchase Agreement) is a simple agreement to acquire membership units of a limited liability company.
Learn more

Price per security

$1

The price of each membership unit.
Learn more

How it works

Documents

Republic (OpenDeal Portal LLC, CRD #283874) is hosting this Reg CF securities offering by Bottle and Barrel I LLC, a series of Vinovest Capital, LLC. View the official SEC filing and all updates:
Official SEC Logo Form C SEC.gov
Company documents
Vinovest Bottle & Barrel 1 IPA Bottle and Barrel I LLC Form C.pdf

Bonus perks

In addition to your Crowd IPA, you'll receive perks for investing in Vinovest Bottle & Barrel 1.
Invest
$2,500
Receive
  • One month waived fees when starting your Vinovest portfolio on vinovest.co
Invest
$10,000
Receive
  • Three months waived fees when starting your Vinovest portfolio on vinovest.co
Invest
$100,000
Receive
  • Three months waived fees when starting your Vinovest portfolio on vinovest.co
  • Plus: Invite to our exclusive annual shareholder event.

About Vinovest Bottle & Barrel 1

Legal Name
Bottle and Barrel I LLC, a series of Vinovest Capital, LLC
Founded
Oct 2021
Form
Delaware LLC
Employees
0
Website
vinovest.co
Social Media
Headquarters
Google Map location of of Vinovest Bottle & Barrel 1
9900 Culver Boulevard , Culver City, CA
Headquarters
9900 Culver Boulevard, Culver City, CA, United States 90232

Vinovest Bottle & Barrel 1 Team
Everyone helping build Vinovest Bottle & Barrel 1, not limited to employees

Profile picture of Anthony Zhang
Anthony Zhang
Co-Founder
Profile picture of Brent Akamine
Brent Akamine
Co-Founder
Anthony Zhang
Co-Founder
Brent Akamine
Co-Founder

Press

Top 5 wine regions for stock market-beating returns: An e...
Business Insider
·
Nov 16, 2022

Fine wine is an alternative investment that wealthy people have targeted for decades. Over the past year Vinovest has ret...

Why Wine Has Become The Newest Asset Class To Produce Big...
Libsyn Libsyn
·
May 16, 2022

In this episode of the Millionaire Mindcast, we have an incredible guest, Anthony Zhang. Today he talks about wine as an ...

Is Investing in Wine the Right Move for Oenophiles?
WSJ
·
Mar 18, 2022

WHEN MY FRIEND Jeff began collecting great wine in the 1980s, he did it because he loved wine. By 2011 Jeff knew he'd nev...

LIVE MARKETS Red, red wine: inflation proof?
Reuters
·
Feb 18, 2022

Feb 19 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your th...

Fine wine: The unconventionally attractive alt investment...
InvestmentNews InvestmentNews
·
Dec 22, 2021

Look around. Chances are you're surrounded by several alternative investment opportunities, and you don't even realize it...

FAQ

How do I get paid and potentially make returns?

How do I get paid and potentially make returns?

At the end of the Portfolio holding period, all cash inflows of the Portfolio will be distributed to the Investors until the Investors have received one hundred and five percent (105%) of the original capital invested by Investors in the Offering. Thereafter, the Manager will receive a Carry Percentage equal to ten percent (10%) of the remaining profits of the Portfolio less any cumulative management fees owed, but not yet paid, to the Manager. Ninety percent (90%) of the remaining profits of the Portfolio shall then be paid pro-rata to the Investors. For more information please review the offering documents

What are risks that are specific to this opportunity?

What are risks that are specific to this opportunity?

Investors are encouraged to read the Form C filed by the Issuer to better understand the Risk Factors associated with this particular offering.


The holding period is uncertain and may vary.  Investors may never see a return on their investment, and may have to hold the investment for ten (10) years before a return is possible.


Bottle and Barrel I LLC, Vinovest Capital Management, LLC and Vinovest, Inc. are affiliated entities which could create conflicts of interest that may result in transactions that are not arm's-length transactions.


The federal income tax aspects of an investment in the Company are complex and their impact may vary depending on an investor’s individual circumstances. Investors in the Issuer should consider the tax risks associated with the Offering, which are more clearly delineated in the Form C.


While wine and whiskey investments offer the opportunity for gains, those investments also involve a high degree of business and financial risk and can result in all or substantial losses.


Investors have no right or power in the management of the Issuer.

Can I purchase fractional units?

Can I purchase fractional units?

Yes.

What is the minimum and maximum investment to participate?

What is the minimum and maximum investment to participate?

Bottle and Barrel I LLC is accepting investments from $500 to $500,000.

What are K-1s?

What are K-1s?

K-1’s are federal tax documents used to report the income, losses, and dividends for a business' or financial entity's partners. Because this opportunity invests through an LLC, shareholders will be issued a Form K-1 following the end of each tax year.

What fees and expenses are expected to be incurred?

What fees and expenses are expected to be incurred?

The Issuer has planned for various annual and one-time expenses (“Fees”) required to conduct the capital raise and administer the issuance of securities. 

  • Management Fee: In connection with providing its services to the Issuer, the Manager shall receive a management fee equal to two percent (2%) per annum calculated based on the Fair Market Value of the Issuers’ assets. Such management fee will be paid quarterly in arrears via (i) cash from the Issuer’s treasury or (ii) cash generated via a sale of the Issuer’s assets, at the discretion of the Manager.

  • Intermediary Fee: The Intermediary through which the Offering will be conducted is OpenDeal Portal LLC dba Republic (the “Intermediary”). Please review the Form C for  a detailed breakdown of the Intermediary’s fees.  

  • Vendor Fees: The Issuer will incur one-time payment and processing and escrow fees, which are estimated to be approximately one and one-half percent (1.50%) of the capital raised by the Issuer in the Offering, along with legal and accounting fees of approximately $20,000. Additionally, the Issuer will incur ongoing administration fees for tax reporting and third party administrative fees which are estimated to be approximately one-half of one percent (0.50%) of the Fair Market Value of the Issuer’s assets.   

This list of fees is not exclusive or firm. There may be additional fees incurred by the Issuer. Please review the offering documents in full for more information, including the risk factors located therein.  

What is the anticipated Hold Period for the wines and whiskeys held by the Issuer?

What is the anticipated Hold Period for the wines and whiskeys held by the Issuer?

The target holding period is five (5) to seven (7) years, with a maximum holding period of ten (10) years.


The issuer may be dissolved upon any of the following dissolution events: (i) 10 years from the date of issuance of capital interests in the Issuer, (ii) the final distribution of the net assets of the Issuer, (iii) the dissolution of Vinovest, LLC, the master limited liability company for which the Company is a series within, (iv) voluntary determination to dissolve the Issuer, or (v) entry of a judicial decree of dissolution of the Issuer.

What is the structure? What do I own?

What is the structure? What do I own?

The structure of this Crowd IPA is such that investors receive financial interest in Bottle and Barrel I LLC.

What are Membership Units?

What are Membership Units?

Learn more here about membership units.

What is an IPA?

What is an IPA?

An Interest Purchase Agreement (IPA) is an agreement to acquire membership units of a limited liability company (LLC). In doing so, the purchaser (investor) receives ownership in the LLC. Learn more here.

Is this investment opportunity open to international investors?

Is this investment opportunity open to international investors?

This offering is only open to US investors. 

What is the purpose of this newly formed entity (Bottle and Barrel I LLC) as it relates to the offering?

What is the purpose of this newly formed entity (Bottle and Barrel I LLC) as it relates to the offering?

Bottle and Barrel I LLC is the Issuer offering securities. The Issuer's primary purpose shall be to purchase and sell wines and whiskeys, to hold and manage wines and whiskeys for investment and related purposes, and to engage in such other lawful business or activities as approved by the Manager, which are not inconsistent with the foregoing purposes.

What is the organization structure?

What is the organization structure?

The Issuer is a Series LLC of Vinovest Capital, LLC (the Master LLC), with the primary purpose of purchasing and, ultimately, selling bottles of wines and whiskeys.


Vinovest Capital Management , LLC (the “Manager”) is the management company in charge of managing the Issuer.


Vinovest, Inc. is a service provider of the series LLC that provides services for the Issuer (e.g., storage and insurance of the underlying wines and whiskeys).


All entities discussed above are affiliated with each other and with Anthony Zhang, Bottle and Barrel I LLC’s CEO, Co-Founder, and Manager.

What entity am I investing into?

What entity am I investing into?

Bottle and Barrel I LLC (the “Issuer”), a series of Vinovest Capital, LLC, is the Issuer for this investment opportunity.

What is Vinovest?

What is Vinovest?

Vinovest is a modern platform handling the end-to-end process of wine & whiskey investing. The Vinovest team hails from the investment, technology, and wine industries, and operates from Burgundy vineyards to Silicon Valley to Wall Street.

What am I investing in?

What am I investing in?

You are investing in shares of an entity that will own, source, store, and eventually sell bottles of wine and barrels of whiskey.


You are not investing in shares of Vinovest, Inc. 

What’s the difference between this offering and Vinovest?

What’s the difference between this offering and Vinovest?

Bottle & Barrel 1 allows you to invest in fractional shares of an LLC that owns a diversified pool of wine and whiskey.

Vinovest.co allows you to directly own bottles and barrels that you can eventually ship to yourself and drink. 

Still have questions? Check the discussion section.
Show all FAQ

Risks

The Company’s success depends on the experience and skill of its executive officers, the Manager of the Portfolio and key employees of the Manager of the Portfolio.

We are dependent on our executive officers of the Portfolio and key employees of the Manager of the Portfolio. These persons may not devote their full time and attention to the matters of the Company. The loss of our executive officers, Manager of the Portfolio and key employees of the Manager of the Portfolio could harm the Company’s business, financial condition, cash flow and results of operations.

We operate in a highly regulated environment, and if we are found to be in violation of any of the federal, state, or local laws or regulations applicable to us, our business could suffer.

We are also subject to a wide range of federal, state, and local laws and regulations. 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 our license to operate the subject business. As a result, we may incur capital and operating expenditures and other costs to comply with these requirements and laws and regulations.

The Company may not be in compliance with the corporate registration requirements where it operates.

The Company is located in the State of California. Neither the Company nor the master limited liability company under which the Company is a series are currently qualified to conduct business in California. Both companies are in the process of applying for qualification. The Company could be subject to fines, penalties or other administrative actions for failure to qualify in states that it operates in.

Risks Associated with Wine and Whiskey Investing.

While wine and whiskey investments offer the opportunity for significant gains, those investments also involve a high degree of business and financial risk and can result in substantial losses. Many investment decisions by the Manager, in consultation with the Administrator of the Company, will be dependent upon the ability to obtain relevant information from nonpublic sources, and the Manager or Administrator may be required to make decisions without complete information or in reliance upon information provided by third parties that is impossible or impracticable to verify. The marketability and value of any investment will depend upon many factors beyond the Manager's control. A wine or whiskey may have substantial variations in valuation from period to period, face intense competition, and could experience declines in value at any stage. The public market for fine wines and whiskeys can be volatile. Volatility may adversely affect the value of the Portfolio’s investments, the ability of the Portfolio to dispose of its wine and/or whiskey investments and the value of wine and whiskey investments on the date of sale or distribution by the Portfolio.

An Investment in the Company will be Illiquid and Requires a Significant Holding Period prior to any Potential Payout.

The terms of the investment in the Offering may result in an Investor not receiving a return on their investment for a significant period of time as the Company may not offer distributions until the end of the Portfolio’s operation. The target holding period for an investment in the Portfolio is five (5) to seven (7) years, with a maximum holding period of ten (10) years. Additionally, Investors will not be able to dispose of their investment in the Portfolio when they desire and such investment will be illiquid.

No Assurance of Profit or Distributions.

The Portfolio's investment strategy in investing in fine wines and whiskeys, managing those investments, and realizing a significant return for investors is uncertain. There is no assurance that the Portfolio's investments will be profitable or that any distributions will be made to the Investors. The marketability and value of the Portfolio’s investments will depend upon many factors, some of which are beyond the control of the Portfolio. The expenses of the Portfolio may also impact the expected return and Investors could lose the entire amount of their investment.

An Investors ability to receive a distribution of profits will be subject to a distribution waterfall. At the end of the Portfolio holding period, all of the Portfolios cash inflows shall be returned to the Investors on a pro-rata basis until the original capital invested is returned. Republic Investors shall be entitled to the first five percent (5%) of the Portfolio’s profits. Thereafter, the Manager shall receive ten percent (10%) of the remaining profits of the Portfolio, less cumulative management fees. There is no guarantee that Investors will receive a return of their original investment amount or that any or all of the preferred five percent (5%) return of the Portfolio’s profits or profits after payment of the Manager’s carry fee will be distributed.

Management of the Portfolio.

The Investors have no right or power to take part in the management of the Portfolio. Accordingly, the Investors will have no opportunity to control the day-to-day operations, including investment and disposition decisions, of the Portfolio. In particular, the Investors will have no right to participate in the selection, vetting, or investment process for any wines or whiskeys in the Portfolio. The Manager may make recommendations which result in a loss for the Portfolio. There can be no assurance that the Manager will make good recommendations that result in profitable investments for the Portfolio. Investors must be willing to rely on the judgment, skill, experience, and expertise of the Manager to select wines and whiskeys into which the Portfolio will make an investment. Accordingly, no person should purchase the Securities unless that person is willing to entrust all aspects of the management of the Portfolio to the Administrator and the Manager. The Administrator and Manager may be removed and/or replaced as provided in the Operating Agreement.

Portfolio Not Registered.

The Portfolio is not expected to be registered under the Investment Company Act pursuant to an exemption set forth in Section 3(c)(1) and/or Section 3(c)(7) of the Investment Company Act. The Investment Company Act provides certain protection to investors and imposes certain restrictions on registered investment companies (including, for example, limitations on the ability of registered investment companies to incur debt), none of which will be applicable to the Portfolio. The Manager is not registered as a broker/dealer under the Securities Exchange Act of 1934, as amended, or a member of, and subject to the rules of, the Financial Industry Regulatory Authority (“FINRA”). Consequently, the Manager is not subject to the record keeping and specific business practice provisions of that act or the rules of FINRA. Neither the Portfolio nor its counsel can assure investors that, under certain conditions, changed circumstances, or changes in the law, the Portfolio may not become subject to the Investment Company Act or other burdensome regulation.

The Company may also end the Offering early.

If the Target Offering Amount is met after 21 calendar days, but before the Offering Deadline, the Company can end the Offering by providing notice to Investors at least 5 business days prior to the end of the Offering. This means your failure to participate in the Offering in a timely manner, may prevent you from being able to invest in this Offering – it also means the Company may limit the amount of capital it can raise during the Offering by ending the Offering early.

There is no guarantee of a return on an Investor’s investment.

There is no assurance that an Investor will realize a return on their investment or that they will not lose their entire investment. For this reason, each Investor should read this Form C and all exhibits carefully and should consult with their attorney and business advisor prior to making any investment decision.

Although dependent on certain key personnel, the Company does not have any key person life insurance policies on any such people.

We are dependent on certain key personnel in order to conduct our operations and execute our business plan, however, the Company has not purchased any insurance policies with respect to those individuals in the event of their death or disability. Therefore, if any of these personnel die or become disabled, the Company will not receive any compensation to assist with such person’s absence. The loss of such person could negatively affect the Company and our operations. We have no way to guarantee key personnel will stay with the Company, as many states do not enforce non-competition agreements, and therefore acquiring key man insurance will not ameliorate all of the risk of relying on key personnel.

Damage to our reputation could negatively impact our business, financial condition and results of operations.

Our reputation and the quality of our brand are critical to our business and success in existing markets, and will be critical to our success as we enter new markets. Any incident that erodes consumer loyalty for our brand could significantly reduce its value and damage our business. We may be adversely affected by any negative publicity, regardless of its accuracy. Also, there has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact. Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction.

We have a limited operating history upon which you can evaluate our performance, and accordingly, our prospects must be considered in light of the risks that any new company encounters.

The Company is still in an early phase and we are just beginning to implement our business plan. There can be no assurance that we will ever provide a profitable return. The likelihood of our success should be considered in light of the problems, expenses, difficulties, complications and delays usually encountered by early-stage companies. The Company may not be successful in attaining the objectives necessary for it to overcome these risks and uncertainties.

Global crises and geopolitical events, including without limitation, COVID-19 can have a significant effect on our business operations and revenue projections.

A significant outbreak of contagious diseases, such as COVID-19, in the human population could result in a widespread health crisis. Additionally, geopolitical events, such as wars or conflicts, could result in global disruptions to supplies, political uncertainty and displacement. Each of these crises could adversely affect the economies and financial markets of many countries, including the United States where we principally operate, resulting in an economic downturn that could reduce the demand for our products, and impact the value of the Portfolio’s investments, and impair our business prospects.

We rely on other companies to provide services to the Portfolios.

We depend on other companies to provide services to the Portfolio, particularly in regards to brokering of the purchase and sale of wines and whiskeys, storage and insurance, in order to conduct our operations. The Portfolio’s ability to meet its obligations to investors may be adversely affected if suppliers or contractors do not provide the agreed-upon supplies or perform the agreed-upon services in compliance with the Portfolio’s requirements and in a timely and cost-effective manner. Likewise, the value of our investments may be adversely impacted if companies to whom we delegate sourcing, brokering and storing of wines and whiskeys provide services or acquires products which do not meet required specifications.

We rely on various intellectual property rights in order to operate our business.

The Company relies on certain intellectual property rights, particularly trade secrets, to operate its business. The Company’s intellectual property rights are unregistered and may not be sufficiently broad or otherwise may not provide us a significant competitive advantage. In addition, the steps that we have taken to maintain and protect our intellectual property may not prevent it from being challenged, invalidated, circumvented or designed-around, particularly in countries where intellectual property rights are not highly developed or protected. In some circumstances, enforcement may not be available to us because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of our intellectual property. Our failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect our intellectual property or detect or prevent circumvention or unauthorized use of such property, could adversely impact our competitive position and results of operations. We also rely on nondisclosure and noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights. There can be no assurance that these agreements will adequately protect our trade secrets and other proprietary rights and will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets or other proprietary rights. As we expand our business, protecting our intellectual property will become increasingly important. The protective steps we have taken may be inadequate to deter our competitors from using our proprietary information. In order to protect or enforce our patent rights, we may be required to initiate litigation against third parties, such as infringement lawsuits. Also, these third parties may assert claims against us with or without provocation. These lawsuits could be expensive, take significant time and could divert management’s attention from other business concerns. We cannot assure you that we will prevail in any of these potential suits or that the damages or other remedies awarded, if any, would be commercially valuable.

In general, demand for our services is highly correlated with broader economic conditions.

The Portfolio’s success is directly correlated to the market demand in the wine and whiskey investment industry. Our investor base is mainly comprised of young professionals whose income is sufficient to invest; consequently, a substantial portion of our anticipated revenue is derived from discretionary spending which typically falls during times of economic instability. Declines in economic conditions in the United States or in other countries in which we may operate in the future may adversely impact our consolidated financial results. Difficult macroeconomic conditions — particularly high levels of unemployment — could also impact our business, along with other factors including consumer confidence, employment levels, interest rates, tax rates, consumer debt levels, and fuel and energy costs. Slowdowns in the United States or global economy, or an uncertain economic outlook, could adversely affect consumer spending habits and our results of operations.

Our business could be negatively impacted by cyber security threats, attacks and other disruptions.

We may face advanced and persistent attacks on our information infrastructure where we manage and store various proprietary information and sensitive/confidential data relating to our operations. These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack our products or otherwise exploit any security vulnerabilities. These intrusions sometimes may be zero-day malware that are difficult to identify because they are not included in the signature set of commercially available antivirus scanning programs. Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information or that of our customers or other third-parties, create system disruptions, or cause shutdowns. Additionally, sophisticated software and applications that we produce or procure from third-parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the information infrastructure. A disruption, infiltration or failure of our information infrastructure systems or any of our data centers as a result of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or misuse, power disruptions, natural disasters or accidents could cause breaches of data security, loss of critical data and performance delays, which in turn could adversely affect our business.

Security breaches of confidential customer information, in connection with our electronic processing of credit and debit card transactions, or confidential employee information may adversely affect our business.

Our business requires the collection, transmission and retention of personally identifiable information, in various information technology systems that we maintain and in those maintained by third parties with whom we contract to provide services. The integrity and protection of that data is critical to us. The information, security and privacy requirements imposed by governmental regulation are increasingly demanding. Our systems may not be able to satisfy these changing requirements and customer and employee expectations, or may require significant additional investments or time in order to do so. A breach in the security of our information technology systems or those of our service providers could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a loss of profits. Additionally, a significant theft, loss or misappropriation of, or access to, customers’ or other proprietary data or other breach of our information technology systems could result in fines, legal claims or proceedings.

The use of Individually identifiable data by our business, our business associates and third parties is regulated at the state, federal and international levels.

The regulation of individual data is changing rapidly, and in unpredictable ways. A change in regulation could adversely affect our business, including causing our business model to no longer be viable. Costs associated with information security – such as investment in technology, the costs of compliance with consumer protection laws and costs resulting from consumer fraud – could cause our business and results of operations to suffer materially. Additionally, the success of our online operations depends upon the secure transmission of confidential information over public networks, including the use of cashless payments. The intentional or negligent actions of employees, business associates or third parties may undermine our security measures. As a result, unauthorized parties may obtain access to our data systems and misappropriate confidential data. There can be no assurance that advances in computer capabilities, new discoveries in the field of cryptography or other developments will prevent the compromise of our customer transaction processing capabilities and personal data. If any such compromise of our security or the security of information residing with our business associates or third parties were to occur, it could have a material adverse effect on our reputation, operating results and financial condition. Any compromise of our data security may materially increase the costs we incur to protect against such breaches and could subject us to additional legal risk.

The Company is not subject to Sarbanes-Oxley regulations and may lack the financial controls and procedures of public companies.

The Company may not have the internal control infrastructure that would meet the standards of a public company, including the requirements of the Sarbanes Oxley Act of 2002. As a privately-held (non-public) Company, the Company is currently not subject to the Sarbanes Oxley Act of 2002, and its financial and disclosure controls and procedures reflect its status as a development stage, non-public company. There can be no guarantee that there are no significant deficiencies or material weaknesses in the quality of the Company’s financial and disclosure controls and procedures. If it were necessary to implement such financial and disclosure controls and procedures, the cost to the Company of such compliance could be substantial and could have a material adverse effect on the Company’s results of operations.

Changes in federal, state or local laws and government regulation could adversely impact our business.

The Company is subject to legislation and regulation at the federal and local levels and, in some instances, at the state level. New laws and regulations may impose new and significant disclosure obligations and other operational, marketing and compliance-related obligations and requirements, which may lead to additional costs, risks of non-compliance, and diversion of our management's time and attention from strategic initiatives. Additionally, federal, state and local legislators or regulators may change current laws or regulations which could adversely impact our business. Further, court actions or regulatory proceedings could also change our rights and obligations under applicable federal, state and local laws, which cannot be predicted. Modifications to existing requirements or imposition of new requirements or limitations could have an adverse impact on our business.

Taxation Risks.

An investment in the Portfolio may involve complex U.S. federal income tax considerations that will differ for each Investor. Under certain circumstances, the Investors could be required to recognize taxable income in a taxable year for U.S. federal income tax purposes, even if the Portfolio either has no net profits in that year or has an amount of net profits in that year that is less than that amount of taxable income. Furthermore, the Investors could incur U.S. federal income tax liabilities without receiving from the Portfolio sufficient distributions to defray those tax liabilities. Investors subject to taxes associated with the Portfolio's activities will be liable to pay taxes on their allocable shares of the Portfolio's taxable income. There can be no assurances the Portfolio will have available cash or that timely Portfolio distributions will be made to cover those taxes. Accordingly, an Investor may be required to use cash from sources other than the Portfolio to pay that Investors allocable share of the Portfolio's taxable income. The Portfolio will file an annual information return on IRS Form 1065 and will provide information on Schedule K-1 to each Investor following the close of the Portfolio's taxable year if deemed necessary by the Manager. Each Investor will be responsible for the preparation and filing of that Investors own income tax returns.

Tax Laws.

No assurance can be given that current tax laws, rulings and regulations will not be changed during the life of the Portfolio. Subscribers should consult their tax advisors for further information about the tax consequences of purchasing the Securities.

Allocation of Management Resources.

Although the Manager has agreed under the terms of the Operating Agreement to devote sufficient time (in their discretion) to the business and affairs of the Manager, the Portfolio, its other respective business commitments, any parallel fund, and any subsequent fund or portfolio, conflicts may arise in the allocation of management resources.

Other Investment Portfolios.

The Manager or its affiliates may create and manage other investment funds that have similar investment strategies and objectives. Those activities would require the time and attention of the Manager or its affiliates. Any new investment fund created by the Manager may focus on the same investments as those on which the Portfolio anticipates focusing and may compete with the Portfolio for investment opportunities. In that event, the Manager, in its sole discretion, will allocate those opportunities between the Portfolio and those other funds on a basis the Manager believes, in good faith, to be fair and reasonable. Those funds also may compete with the Portfolio for capital commitments from potential investors. In those situations, the interests of the Manager may conflict with the interests of the Portfolio, the Investors or both.

The Company, the Manager and the exclusive broker to the Portfolio are affiliated entities which could create conflicts of interest.

The Manager and CEO of the Company is Anthony Zhang. Anthony Zhang is also the CEO and Founder of Vinovest Capital Management, LLC, the Manager of the Portfolio, and the CEO and Founder of Vinovest, Inc., which is the exclusive broker to purchase and sell wines and whiskeys on behalf of the Portfolio. As such, this could create conflicts of interest, including business dealings that may not be arms-length transactions.

The U.S. Securities and Exchange Commission does not pass upon the merits of the Securities or the terms of the Offering, nor does it pass upon the accuracy or completeness of any Offering document or literature.

You should not rely on the fact that our Form C is accessible through the U.S. Securities and Exchange Commission’s EDGAR filing system as an approval, endorsement or guarantee of compliance as it relates to this Offering. The U.S. Securities and Exchange Commission has not reviewed this Form C, nor any document or literature related to this Offering.

Neither the Offering nor the Securities have been registered under federal or state securities laws.

No governmental agency has reviewed or passed upon this Offering or the Securities. Neither the Offering nor the Securities have been registered under federal or state securities laws. Investors will not receive any of the benefits available in registered offerings, which may include access to quarterly and annual financial statements that have been audited by an independent accounting firm. Investors must therefore assess the adequacy of disclosure and the fairness of the terms of this Offering based on the information provided in this Form C and the accompanying exhibits.

The Company's management may have broad discretion in how the Company uses the net proceeds of the Offering.

Unless the Company has agreed to a specific use of the proceeds from the Offering, the Company’s management will have considerable discretion over the use of proceeds from the Offering. You may not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.

The Company has the right to limit individual Investor commitment amounts based on the Company’s determination of an Investor’s sophistication.

The Company may prevent any Investor from committing more than a certain amount in this Offering based on the Company’s determination of the Investor’s sophistication and ability to assume the risk of the investment. This means that your desired investment amount may be limited or lowered based solely on the Company’s determination and not in line with relevant investment limits set forth by the Regulation CF rules. This also means that other Investors may receive larger allocations of the Offering based solely on the Company’s determination.

The Company has the right to extend the Offering Deadline.

The Company may extend the Offering Deadline beyond what is currently stated herein. This means that your investment may continue to be held in escrow while the Company attempts to raise the Target Offering Amount even after the Offering Deadline stated herein is reached. While you have the right to cancel your investment in the event the Company extends the Offering Deadline, if you choose to reconfirm your investment, your investment will not be accruing interest during this time and will simply be held until such time as the new Offering Deadline is reached without the Company receiving the Target Offering Amount, at which time it will be returned to you without interest or deduction, or the Company receives the Target Offering Amount, at which time it will be released to the Company to be used as set forth herein. Upon or shortly after the release of such funds to the Company, the Securities will be issued and distributed to you.

The Company has the right to conduct multiple closings during the Offering.

If the Company meets certain terms and conditions, an intermediate close (also known as a rolling close) of the Offering can occur, which will allow the Company to draw down on seventy percent (70%) of Investor proceeds committed and captured in the Offering during the relevant period. The Company may choose to continue the Offering thereafter. Investors should be mindful that this means they can make multiple investment commitments in the Offering, which may be subject to different cancellation rights. For example, if an intermediate close occurs and later a material change occurs as the Offering continues, Investors whose investment commitments were previously closed upon will not have the right to re-confirm their investment as it will be deemed to have been completed prior to the material change.

The Securities will not be freely tradable under the Securities Act until one year from the initial purchase date. Although the Securities may be tradable under federal securities law, state securities regulations may apply, and each Investor should consult with their attorney.

You should be aware of the long-term nature of this investment. There is not now and likely will not ever be a public market for the Securities. Because the Securities have not been registered under the Securities Act or under the securities laws of any state or foreign jurisdiction, the Securities 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 effected. Limitations on the transfer of the Securities may also adversely affect the price that you might be able to obtain for the Securities in a private sale. Investors should be aware of the long-term nature of their investment in the Company. Each Investor in this Offering will be required to represent that they are purchasing the Securities for their own account, for investment purposes and not with a view to resale or distribution thereof.

Investors will not be entitled to any inspection or information rights other than those required by law or provided for by the Company Operating Agreement.

Investors will not have the right to inspect the books and records of the Company or to receive financial or other information from the Company, other than as required by law and the Company Operating Agreement. Other security holders of the Company may have such rights. Regulation CF requires only the provision of an annual report on Form C and no additional information. Additionally, there are numerous methods by which the Company can terminate annual report obligations, resulting in no information rights, contractual, statutory or otherwise, owed to Investors. This lack of information could put Investors at a disadvantage in general and with respect to other security holders, including certain security holders who have rights to periodic financial statements and updates from the Company such as quarterly unaudited financials, annual projections and budgets, and monthly progress reports, among other things.

Investors will be unable to declare the Security in “default” and demand repayment.

Unlike convertible notes and some other securities, the Securities do not have any “default” provisions upon which Investors will be able to demand repayment of their investment. The Company has ultimate discretion as to whether or not to convert the Securities upon a future equity financing and Investors have no right to demand such conversion. Only in limited circumstances, such as a liquidity event, may Investors demand payment and even then, such payments will be limited to the amount of cash available to the Company.

There is no present market for the Securities and we have arbitrarily set the price.

The Offering price was not established in a competitive market. We have arbitrarily set the price of the Securities with reference to the general status of the securities market and other relevant factors. The Offering price for the Securities should not be considered an indication of the actual value of the Securities and is not based on our asset value, net worth, revenues or other established criteria of value. We cannot guarantee that the Securities can be resold at the Offering price or at any other price.

The Company Operating Agreement may contain provisions that reduce or eliminate duties (including fiduciary duties) of the Manager.

The Portfolio’s Operating Agreement may provide that the management of the Company, in exercising their rights in their capacity as managers, may not be subject to an independent duty to the Company and to the fullest extent permitted by law, each member of Company waives all fiduciary duties and liabilities of the Issuer’s management. As a result, members of the Company may not be entitled to certain protections that are afforded to equity holders in certain other entities, such as corporations or limited liability companies that have not sought to expressly waive the fiduciary duties of their governing body or other affiliates.

In the event of the dissolution or bankruptcy of the Company, Investors will not be treated as debt holders and therefore are unlikely to recover any proceeds.

In the event of the dissolution or bankruptcy of the Company, the holders of the Securities will be entitled to distributions as described in the Securities. This means that such holders will only receive distributions once all of the creditors have been paid in full. No holders of any of the Securities can be guaranteed any proceeds in the event of the dissolution or bankruptcy of the Company.

The federal income tax aspects of an investment in the Company are complex and their impact may vary depending on an investor’s individual circumstances. Investors in the Company should consider the following tax risks, among others:
  • The amount and times of any distributions from the Company may be determined by the Company’s management’s sole discretion. Whether or not distributions are made, investors will be required each year to pay applicable federal and state income taxes on their respective interest in the Company and will have to pay applicable taxes from other sources. If the Company elects not to make distributions to the investors to pay their tax liabilities, investors will have to fund the payment of their tax liabilities from other sources.

  • Any net losses of the Company and any interest expenses on any debt incurred by an investor to acquire or carry an ownership interest in the Company are likely to be subject to the limitations on deduction of passive activity losses.

  • The IRS may challenge the Company’s allocation and/or characterization of income, gain, loss, deduction, and credit.

  • Investors may be precluded from claiming certain deductions by virtue of application of the at-risk

rules.

  • The Company may claim deductions or other tax benefits to which they believe they are entitled, but there can be no assurance that the deductions or other benefits will be allowed in the event of an audit.

  • The IRS may challenge reporting positions taken by the Company on its tax returns and, if the challenge is successful, seek to impose interest and penalties on taxes found to be due.

  • Tax laws, rules, regulations, and rulings may change, with or without retroactive effect.

The Company does not intend to seek any advance ruling from the IRS on any tax issue, nor does the Company intend to seek any opinion of counsel regarding the tax aspects associated with the Company’s operations or the potential tax impact of an investment in the Company. Each investor must consult its own tax advisor regarding the tax consequences (including federal and state income tax consequences) of investing in the Company, with specific reference to such investor’s own tax situation.

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