4-T Holdings LLC

Company Name: 4-T Holdings LLC

Company Website: http://4-tholdings.com

Contact Name: Joseph Kirkpatrick

Contact Email: joseph@4-tholdings.com.

What is your company's primary cannabis business?: Cultivation

Does your company touch the plant?: Yes

Do you authorize us to provide the following (Pitch Deck) information to our Members?: Yes

Company's Bio (Pitch Deck): 4-T Holdings LLC was formed to cultivate the cannabis plant hemp (“Hemp”) and to sell it in its harvested form (“Bio-Mass”). The Company has obtained the right to cultivate Hemp on approximately eleven hundred (1,100) acres of farmland in the state of Oregon. The Company projects that it will be able to grow approximately twenty-five-hundred (2,500) pounds of harvested Hemp (“Bio-Mass”) per acre with a projected selling price of approximately thirty-three dollars ($33) per pound. Based on those assumptions, the Company projects that it will generate approximately ninety-million dollars ($90,000,000) in gross revenue in 2019 from the sale of Bio-Mass. 

The Company believes it will incur approximately two-million-five-hundred-dollars ($2,500,000) in direct costs to cultivate and sell the Bio-Mass from the one-thousand (1,000) acres that it intends to cultivate. The Company also projects that it will need to make capital expenditures of approximately two-million-five-hundred-thousand dollars ($2,500,000) in capital expenditures in capital equipment and structures to plant, harvest, and cure the Bio-Mass produced. The Company intends to plant the Hemp in and around early June of 2019 which will depend on several factors that primarily caused by the rainfall experienced on the farm in the weeks preceding the planting date and the projected weather over the subsequent weeks that follow the planting of the Hemp seeds. 

The Company projects harvesting the Hemp in approximately October of 2019 and completing the curing and packaging of the Bio-Mass sometime in November of 2019. The Company believes that it will have sold and collected the funds for the cured Bio-Mass by the first quarter or 2020. The Company intends on distributing up to seventy-five percent (75%) of the net earnings to the members of the Company in the first quarter of 2020. The remaining earnings will be reserved to cover the cost to plant three-thousand (3,000) acres in 2020 as well as covering the anticipated capital expenditures needed to expand its cultivation acreage. The Company will assess whether it is in the best interest of the Company to develop a manufacturing facility to extract the cannabinoid “CBD” from the Bio-Mass produced into an oil form commonly referred to as “Full Spectrum Oil” and into a dry powdered form commonly referred to as “Isolate.” Producing Full Spectrum Oil and/or Isolate dramatically expands the profitability of the Bio-Mass produced. However, it may be more profitable to outsource that function to an extraction partner. 
The Company projects that the demand for CBD derived from Hemp will continue to rapidly expand in light of the recent passage of the “Farm Bill” by the federal government in November of 2018. Before the passage of the Farm Bill, Hemp was considered a schedule one drug by the Federal Food and Drug Administration. Although forty-seven (47) states had legalized Hemp on the state level, the federal prohibition prevented Hemp, Bio-Mass, Full Spectrum Oil, Isolate and CBD retail products from being transported across state lines as well as selling CBD retail products in traditional multi-state brick-and-mortar retailers and through the Internet. Although some people violated the federal prohibition on interstate commerce and some CDB products could be found on shelves of multi-state retailers and various websites, the federal prohibition served as a severe restraint on the growth of the CBD industry. 

The CBD industry, as well as the Company, projects that the passage of the Farm Bill will cause a dramatic increase in the demand for CBD products in the United States as well as provide large export demand for Bio-Mass and other CBD Products. The Company projects that the increase in the cultivation of Hemp and the manufacture of CBD retail products over the next year will rise in concert with the increase in demand for CBD products. While it is hard to predict the supply/demand balance over the short-term, the Company projects that the prices of Bio-Mass and retail products will come down as more players enter the market. The Company believes that the supply/demand balance will keep prices relatively high in 2019 and 2020, during which time the company can produce staggering returns on investment. 

The Company projects that the regulatory framework that will be released by the FDA will provide some compliance challenges as well as complying with the various state CBD laws. The Company believes that it will serve as a market advantage to the Company who has an experienced cannabis attorney as an owner and officer of the Company that will help the Company to successfully navigate the regulatory hurdles that will inevitably be present when the final regulations are implemented in late 2019. 

The Company’s founders have successfully grown and harvested Hemp in the state of Oregon in 2017 and 2018 on twenty and forty-acre plots and believes that experience has prepared them for the cultivation of the larger one-thousand (1,000) acre project in Oregon. That experience has also given the Company the majority of the seeds that it is planting in 2019, which will grow Hemp that contains high concentrations of CBD. 

Seed Production
Due to the rapid expansion of the hemp industry over the last few years, the industry lacks enough seeds to meet the demand. Seeds are further complicated by the fact that they will produce both male and female plants unless they are “Feminized,” which is a process that only produces seeds that produce female plants. The male plants do not produce a significant amount of CBD, and if they are not removed early in the cultivation process, they can prevent the female plants from producing CBD as well. The difficulty of removing half of the crop during cultivation and not leaving some male plants in the field is a daunting undertaking. A few male plants per acre can dramatically reduce the CBD content of the female plants. Feminizing seeds is a long process, and over the last two years, the Company has successfully produced several different strains of feminized seeds that the Company will use this year.
The Company is expanding its seed production capabilities this year in order to supply Feminized seeds to other growers. It takes approximately 7,500 seeds per acre to ensure adequate coverage and Feminized seeds sell for between fifty cents ($0.50) to one dollar ($1.00) each depending on the percentage of CBD that the grown plants produce. Selling Feminized seeds is a profitable business. The cost of the seeds will most likely come down in price, but the Company believes that it will take several years for Feminized seed production to catch up with seed demand in the rapidly growing industry. Before the planting of the crop this year, the Company has produced over one million Feminized seeds with a projected CBD content of between thirteen percent (13%) and sixteen percent (16%) with THC below the maximum allowed by law of one-third of a percent (0.3%).
The Company will also sell the excess seeds that it produces each year, which is reflected in the accompanying projections.

Flower Production
A rapidly expanding market in the Hemp industry is using the flower of the Hemp plant for traditional smoking purposes. There are research studies coming out that shows Hemp flower that contains high amounts of CBD is not harmful to the lungs long term and provides a very efficient way to ingest CBD. Hemp flower is selling for as much a $1,000 per pound in the US, and the demand for it is rapidly expanding in not only the United States but also around the world. The Company has certain Feminized seeds that will produce high quality flower that is pleasant to smoke. 

The Company expects to sell $68,000,000 of Flower in 2019 that it produces, which is reflected in the accompanying projections.

The Company has a “Cloning” program that takes plants that are in the vegetation process and then a piece of that plant is taken off and replanted which produces a plant that identical to the mother plant. Clones speed the growing process up by several weeks. Another benefit of planting Clones versus seeds is it eliminates the risk that the planted seeds will not germinate because the plant is already grown to approximately six (6) inches in height before they are planted. The Company anticipates having over one million (1,000,000) Clones by the time it starts to plant in 2019. 

Innovation in Equipment
Hemp cultivation was ceased for all practical purposes in the 1930s and, as a result, farming equipment designed for the unique characteristics are not readily available in the marketplace. Paul Anderson, the Company’s V.P. of Farming Operations, has worked with multiple midwestern universities to test a new piece of equipment that is capable of planting hundreds (100s) of acres per day of Feminized Hemp seeds. Paul has also sourced a custom designed Clone planter out of Europe that is capable of planting 20,000 Clones per hour. Paul is also working with a specialized boutique equipment manufacturer to refine a harvester that will be able to not only harvest Hemp at industrial scale, but also protects the valuable flower that the Hemp plant produces. Most of the Hemp that will be grown in the United States this year will be hand planted and hand harvested. Although that works for small plots of Hemp, it is not scalable to industrial farming.

C-Suite Bio's (Pitch Deck): Jeffrey Yarosz – Manager and Chief Executive Officer
Jeffrey leads the strategic finance and financial oversight for the company as well as serves as its Chief Executive Officer. Jeffrey is a graduate of Indiana University and has been in the financial industry for sixteen years. Much of his experience has been in the Advance Wealth Planning and Financial Advisory services sectors. He was a Principal at World Equity Group and Compass Asset Management. He also has experience as a commodities future’s trader. He is the co-founder of Primal Equity Partners, a Chicago based financial firm, operating at the Chicago Mercantile Exchange and Chicago Board of Trade. Jeffrey's commodities experience and over sixteen years of working in structured finance role across private equity and funds bring valuable expertise to complement the deep cannabis operations experience.

J. Eric Kirkland -- Chief Financial Officer and General Counsel
Eric has been a licensed attorney in California for over twenty-nine years and represents some of the leading cannabis companies in the United States as well as startups around the country in the cannabis, hemp, and CBD industries. He started his career as an accountant before becoming an attorney in 1990. Eric’s roots as an accountant have enabled him to primarily focus his legal career in transactional corporate business law, securities, secured transactions, and tax-related issues. Eric holds a Doctorate in Law (JD) from Pepperdine University School of Law. His broad skill sets make him an excellent legal counsel.

Eric has served in the CFO capacity for many of his clients and has successfully guided them through the implementation of complex accounting software installations, IRS tax audits, certified public financial audits, and a broad array of different financing strategies. 

Ron Strickland – Founder, Manager, and Chief Operational Officer
Ron has over twenty-five years of agricultural farming experience and more than twelve years of cannabis cultivation experience. Ron has been involved in the CBD industry since mid-2012 and has a deep understanding of the industry. He is considered one of the veterans of the industry. Ron specializes in cannabis and is an expert in cannabis breeding. He is a serial entrepreneur with a focus on companies that leverage technology being deployed in the cannabis industry. Ron successfully created consumer cannabis products, including the brand Happy Hashers Soda, one of the first edible lines within the medical cannabis markets in Oregon and Washington State. Ron's cannabis products have been featured in many cannabis industry blogs and magazines.

Stan Orlowski – Chief Operations Officer
Stan is a motivated and highly talented individual with a strong background in multiple areas including Vendor Management, Client Management and Support, Program, Project and Release Management. Stan’s career includes over twenty-five years of experience working in the high-tech industry where he spent over eleven of those years working at Microsoft. Stan help build and enhance the Office 365 suite of products. He holds a master’s degree in public history from the University of San Diego. 
Stan has extensive experience in the building and running of a Cannabis business. He was an owner, grower and member of the Board of Directors of a Tier 3 Cannabis grow operation in Washington State. He was a pioneer in a newly legalized business and held a role as a utility player with duties ranging from construction, production planning, processing, new business development, marketing, and packaging.
Paul Anderson – Vice President of Farming Operations
Paul is the product of a lifetime spent in the agriculture industry. He grew up on a 2,000-acre livestock and row crop farm in Illinois before attending Iowa State University and graduating with a degree in Agricultural Engineering. Paul has held a variety of positions in the agriculture industry including overseeing farming operations to marketing agricultural products. Paul is taking the lead on precuring state-of-the-art equipment to plant and harvest Hemp.

David Stock -- Master Grower
Dave has vast experience working in the Industrial Farming arena. He has partnered with some of the leaders in the hemp cultivation and extraction industries and has extensive experience in the planting, cultivating and growing of large-scale farming operations in Oklahoma, Washington and Oregon. Last season he successfully developed 1,200 acres of high yielding hemp in southern Oregon that was extracted into bulk CBD. This included the planting of 1.4 million plants with a combination of seeded and planted materials. The farm he was responsible for was one of the largest successful medical grade Hemp farms in the United States. In Dave’s extensive farming career, he has specialized in organic soil and organic farm practices as well as supply chain management. His role will be to design, manage, oversee and will be work on continual improvement of our farm operations. 

Julie Pease, PHR -- Director of Human Resources
Julie has twenty-five years of experience leading human resources and talent acquisition for organizations of varying sizes and industries that span across multiple vertical markets including technology, entertainment, travel, renewable energy, oil and gas, real estate, finance and blockchain technologies. Her passion and expertise lie in driving value through employee engagement and innovative human resource and talent solutions along with a philosophy of continuous learning. Her results driven approach, business acumen, and commitment to integrity, provides the ability to easily partner with leadership teams as a trusted adviser. Julie has broad human resource and talent acquisition expertise that ensures desired outcomes and aligns organizations to meet their overall goals, while remaining true to their culture and core values. Julie holds a Bachelor’s degree from Western Washington University. She is a certified Professional in Human Resources (PHR).

Susan Strickland -- Chief Compliance Officer
Susan began her career as a laboratory technician responsible for supporting head researcher in efforts to establish technical proof-of-principle of biomarker measurements. Susan has eight years of experience in running backend cannabis operations with the role of ensuring compliance with state and federal regulations of cannabis production. Her experience of cannabis regulations is an invaluable skill set in the highly regulated Hemp/CBD industry.

Joseph Kirkpatrick -- Executive Vice President, New Business Development
Joseph has extensive sales and leadership experience running sales teams in the medical device world for over eight years. His passion and drive for business have made him extremely successful throughout his career. Joseph holds his bachelor’s degree in international business from Clarion University. He has won multiple presidents club awards for a top individual sales representative in the country as well as led multiple sales teams to award-winning years. He is well versed in financial services and is a partner of Primal Equity Partners three years ago. Joseph has helped lead Primal Equity Partners through extensive capital raises as well as guided their sales team through multiple complicated transactions.

Growth Plan (Pitch Deck): See Company bio above.

Investment Opportunities (Pitch Deck) : Below is a summary of the deal terms of the Offering of 4-T Holdings LLC (the “Company”) Class A Notes with its Class A Units as an equity kicker as set forth in detail in the Company’s Private Placement Memorandum, Note Subscription Agreement, and the Company’s Operating Agreement dated February 20, 2019 (“Operating Agreement”) which accompanies this Summary of Deal Terms. This summary is meant to merely summarize the terms of the Company’s offering and should be read with the preceding mentioned documents.

Type of Note Offered: Class A Notes

Equity Kicker: Class A Units; One (1) Class A Unit for ten dollars ($10.00) invested. Each one-hundred-thousand (100,000) Class A Units equals one percent of the ownership of the Company and is non-dilutable by the issuance of any other form of equity in the Company. See Article Three of the Company’ Operating Agreement provided along with this Summary of Deal Terms.

Offering Amount: $10,000,000

Interest Rate: 15% Simple Interest

Maturity Date: Third Anniversary of the Investment Date 

Repayment Terms: The accrued interest on the Class A Notes will be paid on March 1, 2020 and every quarter thereafter until the Maturity Date. On the Maturity Date, the principal and all accured interest will be paid to the holder of the Note. See Note Subscription Agreement for a full description of the terms and conditions of the Class A Note. 

Minimum Investment: $200,000

Anticipated Uses of Proceeds:

Operating Costs: $4,500,000 will be used to cover the costs of operations to plant, cultivate, harvest, and sell 2,000 acres of Hemp on farm land in the state of Oregon in 2019.

Capital Expenditures: $2,500,000 will be used to make capital expenditures for equipment, construction and renovation of structures necessary to cure and process the harvested Bio-Mass, and other capital equipment necessary for the administration of the business.

Capital Reserves: $3,000,000 for capital reserves to cover unexpected costs and the costs that may exceed the Company’s projections.

Eligible Investors: Accredited Investors and a maximum of thirty-five Sophisticated Non-Accredited Investors as the term is defined in Rule 501 of Regulation D promulgated under the Securities Act. Please see Investor Suitability Requirements in the Note Subscription Agreement.

Closing Date: The Offering will terminate on March 31, 2019, unless extended or terminated by the Company in its sole and absolute discretion.

Voting Rights: Neither the Class A Noteholders or the Class A Unitholders have the right to vote on the appointment of Managers. The voting rights of the various membership Unit classes are set forth in the Company's Operating Agreement.

Distribution Rights: Class A Unitholders have equal rights to capital, earnings, and liquidation distributions in relation to their ownership in the Company, which are set forth in detail in the Company's Operating Agreement. 

Authority to Issue Units: The Members of the Company have given the Board the authority to issue ten million ($10,000,000) Class A Notes and the Class A Units to raise capital to finance the business in the amounts set forth in this Memorandum. Article Three of the Company's Operating Agreement authorizes the Company’s Board of Managers to issue up to one-million (1,000,000) Class A Units as an equity kicker to the purchase of the Company’s Class A Notes in this Offering.


Dan Humiston