farmworks update...farmworks will become profitable. please review the information in the sixth...

10
FarmWorks update December 2016 TM 70 Eden Row, Wolfville RR2, NS, B4P 2R2 [email protected] 902-542-3442

Upload: others

Post on 05-Aug-2020

1 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

FarmWorks update

December 2016

TM

70 Eden Row, Wolfville RR2, NS, B4P 2R2 [email protected] 902-542-3442

Page 2: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

1 FarmWorks Report

December 2016

Summary

FarmWorks Community Economic Development Investment Fund (CEDIF) was

founded in 2011 to raise a significant amount of money to support farms and food

producers. Nova Scotia has the potential to sustainably supply much more food,

and money loaned to food producers is an investment in the economy, health,

rural areas, communities, culture, and the environment.

FarmWorks investors understand the benefits of keeping their money closer to home and they have faith in the

ability of farmers and producers to increase production and profitability. In five CEDIF offers to date 352

shareholders have invested $1,405,700 which has been loaned to 63 businesses that provide food and economic

and social benefits for all Nova Scotians.

The Sixth Offer is now open and we’re asking for your assistance as we raise more capital to support outstanding

businesses. Please forward this information and the link to FarmWorks website to

everyone who may be interested. There will be meetings in January and February

across Nova Scotia at which clients and applicants will promote their businesses

and FarmWorks will discuss the benefits of investing in FarmWorks CEDIF.

Potential applicants are encouraged to contact [email protected]. These

enjoyable events include conversations and local food. Locations and times for

sessions across Nova Scotia will follow. We hope you can attend and bring friends!

The successes of FarmWorks clients ensures the success of the

CEDIF. The Directors spend many hours on due diligence before

loans are granted and follow client’s businesses carefully. From

2012 with little revenue to this year with $23,000 in principle

and interest repaid monthly, the portfolio is being grown and

managed to ensure long-term profitability and sustainability. All

offering and operating costs have been paid and in 2017

FarmWorks will become profitable. Please review the

information in the Sixth Offering Document and Financial Statements.

In March 2017 Investors who purchased shares in the First Offer in 2012 will receive five year 20%

Provincial Tax Credit Certificates from the Department of Finance to include with their Income Tax

Return provided their funds remain invested for another five years. Shares purchased with the 20%

reinvestment Tax Credit will qualify for 35% tax credit on new Shares. If your address has changed

since March 2012 or if you have questions about reinvesting or redeeming your shares, please

contact [email protected] by January 31st, 2017. When FarmWorks’ accountant issues the 2016

Financial Statements the Directors will discuss the allocation of profit starting in 2017 including

options for shareholder dividends and will release a statement following the January board meeting.

We appreciate your help with encouraging people to invest in Nova Scotia. The Directors are aware of

opportunities being missed because of lack of funds, mentoring and promotion. We need to keep

increasing the amount of money available to local food related businesses – the future is ours to grow.

Please let us know if you might consider joining the Board of Directors – we’d love to talk with you!

Page 3: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

2 FarmWorks Report

December 2016

CHAIR’S REPORT – Peter Hicklenton

As 2016 draws to a close we can mark another very successful year for FarmWorks. With your support, we

have continued to help new food and agriculture businesses make a good start, and, for those already in

operation, we have provided support for improvements that will bring more local products to market.

After passing the $1.4 million mark in shareholder capital in 2015, we have been

hard at work networking with local producers, processors and retailers,

creating linkages across the food spectrum and helping out financially wherever

needed. And that is indeed the key to FarmWorks success – our diligence in

working with our clients to help them choose a path to success, whether that

means getting in touch with the right people to market their product,

purchasing a new piece of equipment, or opening a new restaurant or farm market. By paying close attention

to the special relationships we have with our clients, we have continued to attract the attention of the

Provincial Government and Nova Scotians from all walks of life who want to be a part of economic renewal,

and a collective pride in our primary production industries in Nova Scotia.

The number of businesses that we count among our valued clients increased from 34 in 2014 to 50 in 2015

and to 63 in 2016. We delight in celebrating the most recent successes of our clients including:

The Port Grocer, Port Medway - two Queens/Lunenburg Business Excellence awards

The Flying Apron Inn and Cookery, Summerville, Hants County - The Taste of Nova Scotia 2015 Chef- Inspired

Casual Dining Restaurant of the Year award

Big Spruce Brewing, Nyanza - Parks Canada 2015 Sustainable Tourism Award; 2016 Atlantic Beer Award

Studio East, Halifax - The Herald’s Bourgeois Gourmet Restaurant of the Year (Metro) award

Field Guide, Halifax - one of three Nova Scotian restaurants included in Canada’s 100 Best Restaurants

Boxing Rock Brewery, Shelburne – gold and silver medals in the 2016 Atlantic Beer awards

Valley Flaxflour, Middleton – Taste of Nova Scotia Product of the Year

We cannot help but be impressed by the diversity and quality of

entrepreneurship exhibited by these enterprises, and their commitment to

including ‘local’ as a driver of their success, through purchase of primary

products from producers across the Province. Sometimes even the best-laid

business plans do not work out – FarmWorks incurred some losses in 2015, but

we are pleased to report that we continue to work with those whose plans have

gone awry, with a view to both re-paying FarmWorks, and helping them to get their professional lives back

on track. Notably, FarmWorks has experienced no financial loss in 2016, and we are working hard to continue

that trend.

Partnerships continue to be a cornerstone of our business strategy, and we are pleased to have collaborated

with the Atlantic Canada Opportunities Agency (through Futurpreneur), CBDC and Nova Scotia Credit Unions

in providing capital to local businesses. FarmWorks treasurer and founding member, Linda Best, has been

invited to speak about FarmWorks in forums across Canada, and internationally. But perhaps most

importantly, the example set by FarmWorks has resonated strongly in our own Province, with our political

representatives, and with the general public.

Page 4: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

3 FarmWorks Report

December 2016

COMMUNITY ECONOMIC DEVELOPMENT INVESTMENT FUNDS

CEDIFs are currently the best mechanism to efficiently and effectively leverage local capital, and FarmWorks CEDIF aims to help build a sustainable agricultural and food economy, help rebuild rural communities and contribute to all aspects of life in the Province. FarmWorks provides the means for citizens to invest in multiple well-managed enterprises that are scaling up or launching agricultural and food-related businesses.

VISION Healthy Farms, Healthy Food

MISSION Promote, and provide, strategic and responsible community investment in food production and distribution to help increase access to a sustainable local food supply for all Nova Scotians.

GOALS Promote investing locally and buying local food to gain health, economic, social, environmental and other benefits that result from growing and processing food in Nova Scotia.

Sell common shares with a value of $100 that are non-retractable and non-redeemable for 5 years that allow Nova Scotians to invest a significant percentage of their capital in NS agriculture and food related enterprises.

COMMUNITY ECONOMIC DEVELOPMENT PLAN – 2016 1. In accordance with its Articles of Incorporation and Bylaws, FarmWorks Investment Co-operative Limited, a for-profit Co-

operative with a Board of Directors elected by the shareholders who are residents of Nova Scotia, is: a. carrying on an active business that evaluates and makes eligible investments in Nova Scotian businesses that increase

access to a sustainable local food supply for Nova Scotians; b. providing information and educating investors who are interested in supporting food producing enterprises in Nova Scotia

with regard to the role of capital in business, the value of equity investments to the defined community and the rights and obligations of corporations and shareholders,

c. investing the capital raised, for which a tax credit pursuant to the Act has been issued, in eligible food producing businesses in Nova Scotia,

d. exercising ownership rights with respect to the eligible investments made by the corporation, e. providing the administrative support necessary to carry on the business of the corporation, including preparation of

annual reports and the holding of meetings of shareholders and the Board of Directors, 2. FarmWorks Investment Co-operative is carrying on this business for the people of Nova Scotia in order to increase access to a

sustainable local food supply for Nova Scotians, 3. FarmWorks Investment Co-operative Limited has made provision for annual general meetings of the shareholders, 4. FarmWorks Investment Co-operative Limited is providing mentoring support and is helping to facilitate farm and food-related

innovation and diversification in partnership with government and non-government organizations. 5. FarmWorks Investment Co-operative Limited is monitoring and evaluating other investment tools and investment opportunities

that may be used to achieve FarmWorks goals. 6. Develop and market a Community Economic Development Investment Fund that raises a minimum of $50,000 up to a

maximum of $1,000,000 of equity capital in the Sixth Offer, and a. the $100 (minimum one share) shares are fully paid, newly issued voting common shares that are non-retractable, non-

redeemable for 5 years, non-convertible and not restricted in profit sharing or participation upon dissolution and are of only one class without series and have never previously been issued,

b. Investments may be eligible for a 35% Nova Scotia non-refundable Equity Tax Credit (may be carried forwards 7 years and backward 3 years) and for RRSP tax deferral. Investments are eligible for further Equity Tax Credits of 20% and 10% at the 5 and 10 year investment anniversaries, respectively, if the CEDIF meets Nova Scotia Security Commission conditions.

c. will be issued from the treasury of the corporation on being fully paid for in cash d. will be registered in the name of each shareholder that purchases them or in the name of a trustee, if the shares are held

by the trustee for the benefit of a shareholder, e. do not have any rights or restrictions that may be prohibited by these regulations;

7. If a share certificate is not required to be issued to each new shareholder, an investment confirmation will be issued to each new shareholder within thirty days of share registration, setting out at least the following: f. the number of shares acquired, the price paid per share, the total amount paid, and the procedure for obtaining the tax

credit receipt pursuant to the Act.

Community Economic Development Portfolio 8. FarmWorks Investment Co-operative grants loans at 6% to qualifying applicants. As of December 31th, 2016

FarmWorks has invested $1,575,000 of the proceeds from the Offers as follows: Pie r Squared, Heather Lunan, Wolfville; Big Spruce Brewery, Nyanza; Kingsville Farm, Jamie and Laura Jensen; Fenol Farm and Photodynamic Inc., Sherri MacFarland and Colin Cameron and Martin Greenwood, Hillsvale; Stewart’s Organic Farm, Alan and Janice Stewart, Hortonville; Oakview Farm, Kevin and Jennifer Graham, Kingsport; Meander River Farm, Alan and Brenda Bailey, Newport; Valley Flaxflour, Howard Selig, Middleton; Meadowbrook Meat Market, James and

Page 5: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

4 FarmWorks Report

December 2016

Margaret Lamb, Berwick; Charcuterie Ratinaud French Cuisine, Frederic Tandy, Halifax; Wandering Shepherd Cheese / Fearann Kisha Farm, Ron Muise and Christa MacKinnon, Grand Mira; Rocky Top Farm, Nelson Millett, New Ross; Helen B’s preserves, Michael Bishop, Mahone Bay; Savour Deli, Karine Moses, Kentville; Local Source Market an Bakery, Sean Gallagher, Halifax; Gold Island Bakery, Jessica Ross, Scotch Village; Vincent Dressings, Gary Kent, Yarmouth, Good Lake Farm, James Lake, Southampton; Field Guide Restaurant, Dan Vorstermans and Ceilidh Sutherland, Halifax; Fruition, Jessie Doyle and Seth Graham, Halifax; Hoppy’s Farm, Byford Hopkins, Blockhouse; The Port Grocer, Annabelle Singleton and Deb Melanson, Port Medway; Millennium Gardens, Victoria and Scott Conrad; Down on the Corner Farm, Dave and Anita Lahey, Maitland; The Flying Apron, Chris and Melissa Velden, Summerville; Getaway Farm, Poyser Family, Canning; South Shore Farm Ltd., David Eisnor, Upper Branch; Boxing Rock Brewing Company, Emily Tipton & Henry Pedro, Shelburne; Forever Green Organic Farm, Terry and Mary Boyle, Tracadie; Rockwell Valley Foods, Jason Rockwell, Avonport; Meadows’ Brother’s Farm, Thian and Emily Carman, Barton; Jackson Lore Strawberry Farm, Jackson Lore, Upper Ohio; Thousand Hills Farm, Kevin Hamilton, Yarmouth; Uprooted Market and Café, Emma Kiley, Musquodoboit Harbour; BullyGoth Farms, Sasha Begg, Carleton; Not Your Mama’s Kitchen, Kirk Rasmussen and Dianne Mitchell, Pictou; Food Noise, Tanessa Holt, Dartmouth; Avondale Sky Winery, Stewart Creaser and Lorraine Vasallo, Avondale; Pachamama, Leanne Braid and Adam McConnel, Antigonish; Peddler’s Pot Mobile Food, Robert MacEachern and Geoff MacDonald, Dartmouth; Casson Family Farm, Marcus Casson, New Annand; Studio East Food + Drink, Saronn Pov and Ray Bear, Halifax; South Hill Farms, David Kopriva, Clementsvale; Michael and Carrie Poyser Farm, Hall’s Harbour; Sam Etemadi Farm, Scott’s Bay; Grant Simpson Farm, Hall’s Harbour; West Nova Agro Commodities, Lawrencetown; Humble Pie, Shauna MacLean and Michael Noakes, Dartmouth; HumbleBee Farm, Elizabeth Faires, Wilmot Station; Duck’s Garden Centre and Variety, John Duckworth, Tusket; Sober Island Brewery, Rebecca Atkinson, Sheet Harbour; Henny Penny’s Farm Market, Nadia Gerrits, New Minas; Old Mill Stream Aquafarm, Karen and Royal Stevens, Lunenburg; Soggy Owl Acres, Anne Warburton, Middle Musquodoboit; Harding Farm, John Harding, Wile’s Lake; All Sauced Up, Vickie Gourley, Truro; Riot Local Food Snack Bar, Nicole Tufts and Sonia Gillies-Damota, Halifax; Terra Mushrooms, Adam Roach and William Freymond, Carroll’s Corner; Food Intuition Catering, Kim MacPherson, West Petpeswick; The Canteen, Renée Lavalée and Doug Townsend, Dartmouth; Cochrane Family Farm, Frank and Lisa Cochrane, Upper Stewiack; The Biscuit Eater, Jessika Hepburn and Chris Graham, Mahone Bay.

9. FarmWorks will invest the proceeds of the Sixth Offering in eligible businesses that will strive to increase their sustainable local food production and profitability by 10% per year by the third year following investment; at the present time the Board of Directors has not decided on specific entities for investment in this offer; mentoring will be provided to investees; investees will be required to submit financial reports to the Board of Directors.

COMMUNITY ECONOMIC DEVELOPMENT OUTCOMES Success for the FarmWorks CED is a measurable increase in food production, positive outcomes for investees and a return on investment for shareholders. The overall success of FarmWorks initiatives: creating employment; contributing to an improving economic outlook for farmers and food producers; helping to restore rural vitality; provide wider access to healthy food; and helping to remove the risks associated with lack of food self-sufficiency.

LENDING Persons seeking loans send a preliminary application to FarmWorks and if their business fits with FarmWorks principles and objectives, the applicant submits a business plan, current and projected financial information and all other relevant information. The business will have strong, experienced and ethical management with a clear and compelling vision; the skills and will to execute the business plan and grow the enterprise and the potential to achieve a minimum of a 10% increase in production and profitability within three years.

Board Members and Advisors carefully evaluate plans, visit the site, meet with the applicants and complete the Comprehensive Review. Loans are provided to qualifying enterprises to help them to increase production, profitability, sustainability, add value and market their products. When the Review is completed the Board votes on the on the application and a loan agreement is signed with successful applicants.

When appropriate, FarmWorks will facilitate mentoring by appropriate Directors, Advisors or other specialists to help insure the success of the enterprise. Borrowers repay loans within two to five year at an interest rate that reflects the unsecured nature of the loan and the patience of investors willing to accept moderate returns on investment. As repayments to FarmWorks are made, money is loaned to other qualifying enterprises.

Social Impact: The business will meet food-related needs, stimulate economic growth, provide social and environmental benefits and collaborate with others to achieve benefits for other producers and consumers. FarmWorks will provide ongoing support in the form of promotion of the benefits of eating healthy local food and investing in local enterprises.

Page 6: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

5 FarmWorks Report

December 2016

See FarmWorks Sixth Offering Document and Financial Statements for more information

FarmWorks Directors have been working diligently to grow the investment portfolio to ensure the profitability and sustainability of FarmWorks. The groundwork has been done and clients and shareholders will increasingly benefit from keeping Nova Scotian money invested close to home.

By the end of December 2016 FarmWorks had loaned $1,575,000 to 63 businesses and all expenses were paid. Loan losses in 2015 have been offset by increased interest income as our portfolio has grown. No loan losses have been experienced in 2016, but prudent provision is made for the future as shown below.

The importance of increasing the amount of capital invested in FarmWorks cannot be overstated. Thriving food related businesses are a cornerstone of rural economic development and contribute to better economic and social outcomes for all Nova Scotians. Food production helps restore rural vitality, provides wider access to healthy food and helps remove the risks associated with lack of food self-sufficiency. FarmWorks shareholders make a difference and make a profit by supporting healthy farms and healthy food.

FarmWorks board is actively discussing the allocation of profit starting in 2017, including options for a

shareholder dividend, and will release a statement following the January board meeting.

CEDIF investments enable Nova Scotians to efficiently and effectively leverage local capital to help build a sustainable agricultural and food economy, help rebuild rural communities and contribute to all aspects of life in the Province. FarmWorks provides the means for citizens to invest in the economy of Nova Scotia.

FarmWorks envisions healthy farms, healthy food, and by extension, healthy people and healthy communities. We are helping to build locally owned businesses in communities across Nova Scotia. Investors in FarmWorks and the businesses supported by FarmWorks are contributors to the resilience necessary for a new economy to take root and grow in Nova Scotia.

-$150,000

-$100,000

-$50,000

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

FarmWorks Actual to 2016 and Projections to 2021

Profit (Loss)

All Income

All Expenses

Loan Loss

Poly. (Profit (Loss))

Poly. (All Income )

Page 7: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

6 FarmWorks Report

December 2016

Page 8: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

7 FarmWorks Report

December 2016

Page 9: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

8 FarmWorks Report

December 2016

Page 10: FarmWorks update...FarmWorks will become profitable. Please review the information in the Sixth Offering Document and Financial Statements. In March 2017 Investors who purchased shares

9 FarmWorks Report

December 2016