EXECUTIVE SUMMARY Bel Vino Winery Information Document Dated February 1, 2017

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4 EXECUTIVE SUMMARY Bel Vino Winery Information Document Dated February 1, 2017 Re: Bel Vino Winery (Bel Vino, LLC) Rancho California Rd. Temecula, CA Riverside County Likely is EB-5 Visa (Green Card) Compatible Web Links To Bel Vino Videos and Photo Galleries: Go to BelVinoWinery.com and click on the Gallery button near the top of the page. World Class Winery & Vineyard Property: Bel Vino Winery is a fully functioning and self-contained winery that has been in business nearly two decades. Under visionary new ownership since late 2011, the winery is now a world class winery in a world class location, with one of the greatest growth potentials of any winery in Southern California. With 40 prime location and prime vineyard acres, growing wine and hospitality business, outstanding facilities, great management team, aggressive marketing and a strong business model, Bel Vino is enjoying strong double digit growth. In October of 2011 the present owner purchased the existing winery and renamed it as "Bel Vino". Under its former name and ownership the winery opened for business in The winery was in need of a major makeover and turnaround when it was taken over by the present owner, and that turn-around was 99% complete as of the date of this document. The present owner has spent approximately $4 million on a complete business turnaround and property rebuild. This includes: remodeling, rebuilding, repairing, etc. the physical property and grounds along with building a new winemaking facility, and includes sums spent on new software, hardware, infrastructure, security, on hiring first rate employees, and on extensive sales and marketing. Exceptional Demographics: Temecula wine country is located within two hours of over 20 million people due to being positioned in the middle of Southern California. It s unlikely that any other wine country in the world is situated in such a densely populated area and among a population that has the wealth and culture to spend on wine, entertainment and hospitality. These demographics drive large numbers of tourists and guests to visit Temecula Wine Country, with Bel Vino receiving an average of 50,000+ visitors annually. Business Model Description: As a fully self-contained and producing winery, Bel Vino farms and manages its own vineyards and operates its own wine production facility. This is accomplished with in-house employees and a top California master wine maker. The winemaking facility was built in 2013 and is a modern, state-of-the-art facility capable of producing up to 100,000 cases, or 1,200,000 bottles, of wine per year. For the hospitality side of the business the company owns and operates: (1) A large tasting room for retail tastings, wine sales, parties and events, (2) a growing wine club, (3) an in-house bistro (cafe) and commercial kitchen, (4) a concert venue, (5) a full service wedding venue and (6) a bed & breakfast inn. The winery enjoys some of the best facilities, location and scenery in the Temecula Valley Wine Country. Revenue Centers: Income is generated from these revenue operations: 1. Retail sales from guest tastings and bottle sales in the tasting room 2. Wine club automatic and regular shipments 3. Wine club member onsite purchases of food and wine 4. Special events, parties, weddings and weekly Friday Nite Live event 5. Bistro wine and food sales 6. Bed and Breakfast inn income 7. Concert performances 8. Sales directly from the BelVinoWinery.com e-commerce center 9. Wholesale to bars, restaurants, hotels, resorts, etc., either directly or through distributors 10. Export wholesale sales 11. Third party wine making at the Bel Vino wine making facility in Temecula

5 Executive Summary, Bel Vino Page 2 Note That This Business Model Means: The Winery is operating several different business and revenue generating centers in one overall operation. Each one of these Bel Vino centers is fully operational with trained managers and staff. Each one of these centers has some complement of software programs, forms, contracts, price lists, marketing materials, policy and procedure, and many have website and social media presence. To start from scratch and bring any one of these revenue centers up to a fully operational mode would easily cost up to $200,000 for each revenue center, and that is without including the cost of any of the fixed assets, building structures or land. Further, this could easily take one to two years to accomplish for each revenue center and many would have to be done sequentially after a different one was completed. Aggressive Marketing: The Winery has a highly effective sales and marketing program which includes a combination of: A sophisticated portfolio of wine with creative branding, the right pricing and sales structure for each product and service, full complement of marketing support materials and tools, well trained and motivated sales people, physical property upgrades which provide a special experience to guests and visitors, and constant monitoring and feedback regarding sales results. Advertising is done through in-depth web and social media marketing, along with mobile phone applications and some local targeted print advertising. Also, the Winery makes extensive use of strategic alliances with tour companies (buses, limos, etc.), area restaurants and wedding services providers (photographers, wedding planners, etc.) Aggressive Sales: The winery has anywhere from 3 to 10 employees involved in retail and hospitality sales on any given day. Each have been given in-depth training for their sales responsibilities. Employees earn commissions and bonuses, have quotas to meet, and are regularly counseled, encouraged and supported in meeting their quotas. Wedding sales are supported by three in-house staff who handle the frequent bridal prospect tours. An outside contract wedding coordinator expert focuses on bringing bridal prospects in for a tour and on closing sales. The Owner directly handles wholesale sales and big ticket sales, and is currently engaged with a well known celebrity for a joint venture line of celebrity wine. The owner is also engaged with a large national retailer for a sales opportunity. Competition Strategies: In Temecula Valley Wine County Bel Vino has one of the best locations, with the best views and has among the best a complement of facilities and quality offerings. The location, the views and the offerings make Bel Vino automatically one of the favorite stops for wine country visitors and tour operators. Hundreds of guests, sometimes over a thousand, pass through the Winery s doors each week. We calculate the total annual foot traffic at 50,000+ guests. The Winery s goal and job is to tap into that foot traffic and turn it into as many sales and new wine club members as possible. The competition has little impact on the Winery s ability or success at selling to those visitors. Bel Vino places special emphasis on producing the best wines in Southern California, and receives daily praise from visitors who proclaim our wine the best in the area. Wine quality provides an important competitive edge for the Winery. The many warm, attractive and cool venues, along with great scenery and location, gives the winery a competitive edge over a large number of other area wineries. The Winery s biggest competitive edge may be its aggressive and smart sales and marketing. Sales and marketing are at the top of our business model priority list. Most of the Winery s competitors are wine makers first, and often are small time business owners and thinkers. Few of them have a good handle on today's marketing dynamics, such as an extensive social media outreach, so much of the marketing done by area competitors has limited effectiveness. Employee Info: Bel Vino has approximately 35 full time and part time employees who are experienced, well trained, motivated and fully capable of running the entire winery operation without additional on site management. Presently this includes: General (operations) Manager, Controller, Finance & Accounting Manager, Head Winemaker, Vineyard Manager & Assistant Winemaker, Food & Catering Manager, Tasting Room & Wine Club Manager, and Head Chef. Profit and Revenue: For the years 2014 through 2016 the total revenue was approximately $1.8 million for each year. The Winery first achieved profitability in October, 2016 and is profitable in The Winery is also now enjoying high-double digit growth. Contact Information: Mike Janko, Owner/Trustee -- mike.aet@hotmail.com Cell:

6 Executive Summary, Bel Vino Page 3 Bel Vino Property and Existing Improvements: SUPPLEMENTAL INFORMATION Total land area: acres (164,181 square meters, 1,767,229 square feet) 30 acres of high quality, well maintained vineyards producing 80 to 100 tons of grapes per year A beautiful 3,266 square foot residence with outstanding valley & vineyard views (currently used as a B&B inn and a wedding venue) built in 1984 and fully remodeled in 2012 A 7,000 square foot main winery building, fully code compliant & permitted, completely remodeled in 2015, containing: A large tasting room & gift shop area, a barrel room events venue, offices, complete commercial kitchen that is permitted & code compliant, modern & high efficiency air conditioning & plumbing, modern & low power LED lighting A 2 bedroom-751 sq. ft. farm house 4 well-landscaped acres surrounding the main winery building An outdoor concert venue with band stand, lighting truss & dance floor that can handle 500+ guests 4 parking lots with a combined parking capacity of up to 120 vehicles, plus informal parking space for another 100+ vehicles. 3 phase 400 amp power service, utility hookups for sewer and water Bel Vino also has a long term lease on a 13,400 square foot warehouse which houses the Winery s production facility and which is located in the City of Temecula, CA. Physical Assets - The winery owns or possesses: 1. An outstanding, intelligent, dedicated and well trained workforce and management team 2. An extensive inventory of high quality, saleable, bottled wine and bulk wine 3. A comprehensive accounting system providing P&L results for each revenue center 4. A complete set of office equipment with a state-of-art computer network and server 5. An extensive, modern security and video system 6. Nearly new fire sprinkler and fire alarm system, fully up to current code 7. An advanced multiple station cash register system, point of sale software, catering - food service and event software, all providing detailed inventory and sales tracking and reporting wine tasting bars & equipment, gift shop furniture & fixtures, gift shop inventory 9. Complete commercial kitchen which is fully staffed, code compliant and permitted 10. All furniture, fixtures & accessories for: Bistro (restaurant), weddings, special events and private parties 11. A full complement of equipment and implements required for farming and supporting the vineyards 12. A full complement of equipment for crushing grapes, winemaking, storage of bulk wine and bottling wine Intellectual and Non-Tangible Winery Assets: 1. Well established brand & logo 2. Customer base which includes 50,000+ guest visits per year 3. Likely is EB-5 Visa (Green Card) Compatible 4. Training and incentive programs for server/sales employees 5. 1,000 member wine club, growing rapidly 6. Customer list and a direct mail list

7 Executive Summary, Bel Vino Page 4 7. Attractive and effective web site with high traffic and with an e-commerce site 8. Extensive advertising & promotional materials, huge photo library 9. Advertising & promotional plan, relationships and arrangements 10. Physical display materials and signage 11. Wine label, advertising and other graphical artwork 12. Numerous and important tour company relationships 13. World class, award winning techniques for winemaking 14. Policy & procedure materials, forms and contracts 15. Price lists (tiered retail, wholesale, distribution, export & bulk) 16. Export document templates & procedures 17. Comprehensive HR materials Excellent Appreciation Potential: Several factors are driving existing Temecula vineyard and winery property values rapidly higher. These include: Very limited availability of prime locations, great demographics with 20 million affluent people living within one to two hours of Temecula, Southern California s high tourism traffic, and overly restrictive local permitting for new wineries. The high guest traffic counts make prime locations especially desirable to hospitality businesses wishing to get established in this growing Wine Country. It is estimated that prime acreage, such as Bel Vino s, has increased 200% to 300% in value in the last five years and is likely to increase a similar amount in the next five years. A similar dynamic is in place for fully licensed & permitted wineries, so that substantial future appreciation of Bel Vino seems to be a near certainty. Estimated Asset Valuations (excluding winemaking facility): $ 9,000, Acres land (of which 30 acres are 225,000 per acre 2,300,000 Buildings, landscaping, driveway, parking lots, utility tie-ins, etc. 650,000 Wine Inventory as of 12/31/ , Oak barrels 260,000* First fall harvest valued as bulk wine (approximately 12,650 gallons) 1,500,000 Business enterprise (operating business, including two lists of assets above) 750,000 Licenses and permitting $14,520,150 Total estimated value - the replacement cost to build a new winery from scratch * As finished bottled wine, the fall harvest has a retail value of $2,010,000 Estimated Winemaking Facility Valuation: $4,000,000 (when factoring in its independent income) Legal & Regulatory Considerations: The winery and its former owners were in litigation for several years but that has been completely resolved and settled. There are no significant legal, zoning or regulatory issues facing the winery. Bel Vino is fully permitted by both the federal TTB (alcohol) and California ABC (alcohol) agencies. The winery and 40 acre property are fully permitted and 100% complete with all zoning, commercial code, plot plan, building & safety, fire, health, transportation, grading and other regulatory and zoning matters with Riverside County.