Winery Investment Opportunity in Sabrosa, Portugal

- The profile and the business was actualized in this year, to reflect current market conditions, new developments in the business and diminish the overall need for investment (maintaining a high growth perspective) to make it possible to reach more investors.

- Company presently operates in the viticulture segment and cultivates grapes and sells it to a major Portuguese wine exporter (Sogrape).

- We also provide consultancy services in the area of agriculture, engineering, and taxes, though it is residual.

- Have 2 permanent employees and 10 sub-contractors for the cultivation of grapes and have a yearly production capacity of 40,000 kg to 45,000 Kg.

- Olive oil is done usually every year, but without a commercial end, yet.

- The vines explored by the company are all in the Douro Valley Region, in high-quality zones.

- Currently, the revenue is only generated through the export of grapes and consultancy services.

- We plan to expand and diversify into the wine production, agriculture, and tourism industry. Towards this expansion, the company has managed to obtain multiple lands and is in the process of leasing additional Quintas for agricultural and tourism purposes (detailed information provided in the facilities description).

- Company seeks an investment of EUR 3.95 million, which will be utilized to purchase lands to make a plantation of pistachios and almonds, vineyards, set up a winery to process up to 45,000 kg of grapes, and purchase or lease buildings and renovate them for tourism purposes: 10 units (villas); 30 to 40 units (hotel); 9 rooms (school);

- Post expansion, we will have multiple sources of revenue through the export of almonds and pistachios, production and distribution of our own brand of wine locally and internationally, and hotel & tour bookings.

Background:

- Company is based on traditional values, pursuing a long-time business from family, and is currently only dedicated to viticulture. The family of one of the promoters has been a winemaker and grape grower for more than 200 years.

- As it is a traditional business, long-term relationships between seller and buyer, as with other viticulturists, are natural and prove to be an advantage when compared with the difficulties experienced by newcomers.

- One of the promoters is an engineer with a post-graduation in finance and taxes and in viticulture and oenology and several other short agriculture courses, in the area of almonds and pistachios. The other promoter has strong family ties to the region, is a post-graduate in finance and taxes, and has several short courses in agriculture. The promoters are married.

- Promoter: Engineering in the last 15 years; consultant in Angola; stakeholder and member of the board in Portugal and Mozambique; projects in Portugal, Cabo Verde, São Tomé e Principe, Angola, and Mozambique; particularly, financial institutions, public institutions, and central banks; Several projects and worksite control of several million euros projects – from as low as EUR 170 thousand to as high as EUR 100 million; more than 10 years of experience in viticulture.

- Promoter – lawyer, particularly working in labor law and taxes, 15 years; stakeholder of two companies in Portugal; large experience in management;

Current products:

- Grapes – 40,000 kg to 45,000 kg. have major Portuguese multinationals as the buyer for the produce.

- Our growth plan after the investment (all unit figures are yearly capacity):

1. Grapes - 100,000 kg to 150,000 kg.

2. Almonds (cruise year) - 50,000 kg to 70,000 kg (plantation of 20 ha);

Pistachios (cruise year) - 18 ha, 28,000 kg to 58,000 kg; after 3rd year, there will be a 2nd phase, and projected plantation of more than 40 hectares (projected quantities will double, after the cruise year of this plantation)

3. Wine (premium&fine) - 30,000 liters to 40.000 liters.

4. Tourism - 30 to 40 units (hotel); 9 units (school); 10 units (Villa)

- There is a large deficit in the market of pistachios and due to drought in the US (California), there are large breaks in the production of pistachios and almonds. Dried fruits are perceived as a healthy food with great growth potential for consumption;

- Great tourism potential, beautiful and peaceful scenarios, filled with vineyards and nature. The market has grown sustainably and the number is already at the level of pre-Covid and is projected to continue increasing.

- Vineyard area is stable due to regulation.

- World wine consumption is projected to continue increasing. Portugal's wine exports are projected to continue increasing in quantity and value.

All the assets are (or will be) leased except for the acquisitions made by the company, agriculture tools (prune scissors, chainsaws, trimmers), and an Isuzu pickup (2016) (fair value is EUR 35,000). The estimated lease gain is detailed in the documents section. There are also the rights to the EU subsidies that are proportional to the land explored and the contract with Sogrape. Also, there is an approved EU fund (EUR 304,000).

Intangible:

- Public concession of school.

- License to explore vines.

- Subsidy rights over the area explored.

Buildings and land:

• Quinta (da Ponte) da Ribeira – 4.0 hectares of vineyards, 7.5 hectares of land with cork oaks, and a 200 square meter house (only walls) (9.5 to 10 hectares, total) (owned by us)

• Several terrains in Celeirós do Douro (Sabrosa) – accounting for 2.2 hectares of vineyards and more than 50 olive trees (owned by us)

• Several terrains in Sanfins do Douro (Alijó) – accounting for 1.5 hectares of vineyards and more than 50 olive trees (family-owned)

• Quinta Sabrosa – 5.5 hectares of vineyards, warehouse, wine lager, and olive oil lager, olive trees, plus some more dispersed area of 8 hectares (13 to 14 hectares, total) (owned by us)

• Terrain next to Quinta – accounting for 6.6 hectares of vineyards and 4 hectares of land (11 to 12 hectares, total) (final stage of negotiation, still on hold) - future ownership by the company.

• Quinta (next to the other quinta) – accounting for 5.7 hectares of vineyards, with buildings and 7 hectares of land (13 hectares, total) (under negotiation, still on hold) - future ownership by the company.

• Rustic old village house – 200 square meter, two-floor house (100 square meters per floor) (owned by us)

• Elementary school – 250 to 300 square meters, two-floor, with patio (city hall/public building leased for 30 years.

• 38 hectares of land leased (we made an application to a national program to buy it through a low interest of 0,5% long-term loan). Nevertheless, the value to buy it is EUR 95,000 (and the agreement is sealed) - future ownership by the company.

The capital of investment is needed for the investments referred to at this point.

1. The company until the present year explored 12 hectares of vineyards and about 20 hectares of land. Almost all of the land is owned by us (about 10,5 hectares of vineyards and 20 hectares of land), the rest (1.5 hectares of vineyards) is family-owned.

2. The company managed to obtain the right to explore, for 30 years, for tourism purposes, the elementary school of Celeirós does Douro (250 to 300 square meter). The contract has been signed with the city hall President and we have already paid a deposit and the concession is in public knowledge. We already have the architecture layout (for 450 sqaure meter) and are going to license it.

3. In addition, there is a 200 square meter house, also in Celeirós do the Douro, owned by our family, that will be leased to the company, that could be used for tourism.

4. We have acquired a “Quinta” with more than 5 hectares of vineyards, 7 hectares of land, and several buildings. Of which, a blazoned old manor house that has a built-up area of 1,500-1,800 square meters with a roofed area of 895 square meters, 3 floors with 1 attic. The entire property needs to be refurbished (rehabilitated) before it can be used. The buildings are ruined or partially ruined, but the stone wall structure is in good condition and other valuable details can (and should be) reused. There is an external area (unroofed) of 732 square meters surrounding the building. In the “Quinta” there is also a 500 square meters old and beautiful warehouse, a wine lager, and olive oil later.

5. There is also advanced negotiation to buy more than 6.6 hectares of vineyards and 5 to 6 hectares of land and another quinta with 5,7 hectares of vineyards, 1,000 square meters of buildings, and 7 hectares of land, both are next to the Quinta that we have bought. Though the negotiation is advanced and we have a preference right over the lands and the deal is not closed at the moment. (future ownership company)

6. There are dispersed vines, next to the vineyards explored by the company, between 3 to 5,5 hectares, that are under negotiation. (future ownerships company)

Most of the assets at the present moment are owned by us or the family:

• Quinta (Ponte da Ribeira) – house and vineyards.

• Quinta (Sabrosa) – 2300 square meter built-up area and Vineyards.

• Land (cork oak, olive trees, pines, and bushes – 17 to 20 hectares)

• Vineyards Celeiros do Douro.

• Vineyards Sanfins do Douro.

• Rustic Old Village House – 200 square meters.

• Vineyard (Sabrosa next to the Quinta) (acquisition under final negotiation, still not closed)

• Elementary public school (city hall ownership)

All the assets described above are or will be leased to the company, the vineyards are leased for free or at a symbolic price and the buildings (school) is leased for EUR 105/month + VAT. The lease has (or will have) a duration of 30 years.

Business is funded through its own sales and services. The owners/shareholders are only two (me and my wife) with 100% of the capital. There are two loans, one of EUR 43,000 (this is advanced of a non-returnable fund, but it will be converted only after the plantation is controlled by IFAP) and another of EUR 24,000. The loans are guaranteed by an EU (or national) fund of EUR 91,000 (that will be received during this year). So all loans are covered. There is pending litigation because of a plantation in which it is demanded our company EUR 20,000 (it is limited to this value) and our company is asking EUR 40,000 (due to losses and civil construction defects). But we believe we are right and the reason is beside us.