Blackwater Brief


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This is a brief description of our business, we have about 2/3 of the financing done and are trying to polish of the equipment side. We should have a new offering and disclosure document out in a week or two.

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Blackwater Brief

  1. 1. Introducing A Maryland based Micro-Distiller of premium spirits TM
  2. 2. <ul><li>In February, 2008 the Eastern Shore-based BlackWater Distilling, Inc. became Maryland's first licensed beverage alcohol distillery in nearly 30 years </li></ul><ul><li>Founded by brothers Christopher and Jonathan Cook of Annapolis, the micro-distillery will use locally-grown grain to produce its inaugural super-premium vodka line </li></ul><ul><li>Additional super-premium products, including seasonal spirit offerings, a gin and whiskey, are planned for future release </li></ul><ul><li>BlackWater Distilling will initially distribute its spirits throughout Maryland, with increasing coverage as production capacity and demand expand </li></ul>BlackWater Distilling Lender Brief: Overview © 2006-2008 BlackWater Distilling Inc. All rights reserved.
  3. 3. Distillation is the process by which alcohol is concentrated by heating a fermented mixture containing a relatively low amount of alcohol, and condensing the resulting alcohol vapor. This works because alcohol evaporates at about 78 Celsius and water at about 100. That’s the technical side of it. The artistic part comes in when you think about the fact that most of the components that are responsible for aroma volatilize at room temperature, and that by distilling you can concentrate them at the same time as the alcohol. The goal of the craft distiller is to capture the aromatic components that identify a variety of distillate, and eliminate the things that would eventually break down, thus liberating the spirit of the grain. Starting production with vodka allows for rapid turnaround from raw ingredients to finished product though micro-distilling products range from eau de vies to absinthe. Micro-distilling: What? © 2006-2008 BlackWater Distilling Inc. All rights reserved.
  4. 4. <ul><li>BlackWater Distilling has chosen an operating model designed to eliminate as much financial risk as possible. Initial production will take place on a ‘nights and weekends’ basis leveraging unpaid officer labor and limited contract labor from our professional distiller. We have arrived at a schedule which will allow us to keep production up and initial costs down while building a robust sales and distribution network. </li></ul><ul><li>Each officer of the company will defer salary until the company can support them, with planned roll in of full time staff expected in a 12-16 month timeframe, beginning with Operations staff. In the interim, a virtual phone system will direct all telephonic contacts to a PT Admin or re-route them to officer mobile phones during business hours. </li></ul><ul><li>Each officer’s contributions have been mapped considering the schedules of their current employment, allowing them to be valuable contributors while maintaining independent income streams. Equipment plans have focused on 100% domestic fabricators, making fabrication time shorter and end product less expensive without compromising quality. </li></ul>© 2006-2008 BlackWater Distilling Inc. All rights reserved. Blackwater Distilling: How?
  5. 5. <ul><li>BlackWater Distilling is comprised of three principle officers and two external directors supported by one contracted production manager and an external board of technical advisors including subject matter experts in fermentation and distribution </li></ul><ul><li>The three principles are Christopher Cook (8+ years of Project Management experience), Jon Cook (8+ years of small business experience in Intelligence Community) & Mark Troxler (10+ years in Commercial Real Estate) have all committed the last four years to spirits education and business development </li></ul><ul><li>Two external directors are Rich Cook and David Carney; both successful small business owners who have offered both advisory and financial assistance over the past four years </li></ul><ul><li>Jon Blair, Production Manager of Celebration Distillation when it received a Gold Medal and Silver Medal in 2007, has extensive experience with distillation, fermentation, development and blending. He is also an expert in plant sanitation; recipe and product development; and quality control. Mr. Blair has also worked as an Assistant Production Manager. </li></ul>© 2006-2008 BlackWater Distilling Inc. All rights reserved. Blackwater Distilling: Who?
  6. 6. <ul><li>We believe that the timing and market opportunities within distilled spirits make this a venture which will achieve unquestionable success </li></ul><ul><li>While most entrepreneurs may be wary of an economic downturn, we see it as a great opportunity for a business in such a resilient industry </li></ul><ul><li>The past ten months have already seen retail delivery increases of 100,000 gallons in Maryland alone </li></ul><ul><li>Examining the past fifteen years of sales within Maryland show that twelve realized market growth, with minimal losses in the other three years </li></ul><ul><li>In the past five years distilled spirits sales volume has increased nearly 20% </li></ul><ul><li>Three year forecast for spirits shows average of 2.1% growth per annum, with continued growth of premium and super premium brands </li></ul>Blackwater Distilling: Why? © 2006-2008 BlackWater Distilling Inc. All rights reserved.
  7. 7. © 2006-2008 BlackWater Distilling Inc. All rights reserved. Estimated Completion Date Blackwater Distilling by Phase Begin production March 2010 From Start of Commercial Production Produce approximately 60 cases per week; maximize marketing funds/efforts Gauge demand, adjust production and output; diversify offering ASAP Re-baseline equipment, staffing and facility needs after 12-16 months of production Phase 3 December 2009 Upon Receipt of Financing Finalize lease in Chesapeake Bay Business Park and begin talks with licensing agencies for facility move; purchase and take receipt/install of all equipment Initiate and complete prototyping to proper scale for commercial production (for retail sale) Office Prep & Marketing launch Phase 2 November 2009 Currently Underway Product and package prototype development Property identified Secure lending Phase 1
  8. 8. Current Equity Investment Current officer, director and external investor investment in and on behalf of BlackWater Distilling, Inc. stands at $165,020. Facility Chesapeake Bay Business Park offers ample convenience and commercial space in the range of 7-13 dollars per square foot, for warehouse and office respectively Construction Construction costs will be included in lease, as KRM makes the space suitable for our production needs, to include trench drains, thicker slab and boiler Equipment Equipment will include all components of turnkey distilling system provided by Vendome Copper, Louisville, Kentucky. This equipment is the best domestic manufactured available, and was chosen after years of research, both first hand and academic, into the three primary vendors. (equipment cost is approximately $257,000) Operating Cost Operating cost will cover our initial shortfall forecast, management reserve and ‘other equipment’ to accommodate product introduction phase. (Operating cost is committed by The Talbot Bank for 275k) Blackwater Distilling: Use of Funds © 2006-2008 BlackWater Distilling Inc. All rights reserved.