Cleveland Whiskey Investors FAQs
Why is WeFunder asking for my Social Security Number/Tax ID?
For us to provide you with appropriate tax forms, our investment platform (Wefunder) will need you to provide your Social Security or Tax ID number as part of your profile. The number is kept securely and provided to us for tax purposes only.
When Do the Bonds Start Accruing Interest?
Although funds may remain in escrow for approximately 30 to 60 days after a round closes, the company began to accrue interest on the whiskey bonds as of March 1, 2021, the date that the Regulation Crowdfunding campaign closed. Investments which have been properly funded but are subsequently denied for reasons which many include oversubscription, missing and/or errors in social security numbers, errors in contact information and/or other causes, will be returned without interest.
Are Whiskey Bonds Taxed?
You will have taxable income for the accrued interest earned to claim on your personal income taxes annually beginning the 2021 taxable year. In January or February of 2022, we will send you your first form 1099-OID to include in your 2021 tax return.
Address or E-Mail Changes.
To insure we can provide you with relevant updates and annual tax form, as well as allowing for us to collect information regarding your choices regarding whiskey conversion, barrel head and stave engraving and other information regarding your bonds, it’s critically important that we always have your current and updated e-mail and physical mailing address.
Once the investment process is complete the email you provided for WeFunder will be added to the investors email list. Please stay subscribed so that you will get the updates about the business and other critical communications. You are welcome to subscribe to the marketing list as well via the form on our website.
If you change email or physical address, let us know addresschange@clevelandwhiskey.com.
Also be sure that e-mails from clevelandwhiskey.com are not going into your junk mail. Mail you receive that is directly related to your investment will come from investor@clevelandwhiskey.com. To ensure that the email makes it to your inbox (not caught in spam) please whitelist this investor email address. (Click for a How to whitelist an email and choose the email you use)
What If I Already Unsubscribed? How Can I Get Back on the List?
If you already unsubscribed from the list, please let us know at the addresschange@clevelandwhiskey.com address and we will walk you through the process. Also be sure that e-mails from clevelandwhiskey.com are not going into your junk mail.
Mail you receive that is directly related to your investment will come from investor@clevelandwhiskey.com. To ensure that the email makes it to your inbox (not caught in spam) please whitelist this investor email address. (Click for a How to whitelist an email and choose the email you use)
Do I Have to Choose Between Bourbon or Rye Now?
Whether or not you will be converting some or all of your accrued interest and principal into whiskey on maturity, you must select either bourbon or rye to be put aside as security for your investment. Your selection now allows us to properly allocate sufficient barrels into each category. You will retain the flexibility to decide on conversion at a later date.
Note that your individual investment will be assigned to a specific barrel. Prior to maturity (March 1, 2027), you will receive an election notice asking whether you want to convert all or part of your investment into bottled whiskey.
Important. We will e-mail you a selection form. If you do NOT return the form indicating a preference we will, by default, assign your investment to Bourbon.
Do I Get A Barrel Head?
If you invested in increments of $5,000, you are entitled to an engraved barrel head for each barrel increment. When we reach out, prior to maturity (March 1, 2027), regarding your conversion option we will ask you for the specific name or names to be engraved. Given size constraints there will be character limits on the engraving.
What About the Barrel Stave Wall?
Every bond investor, regardless of amount invested, can opt to have their name engraved on a white oak barrel stave and be made a permanent part of our investor wall in the new distillery. Legal names only and character limits based on size constraints will apply.
A separate communication from investor@clevelandwhiskey.com will provide more details at a later date. You must opt-in for this wall.
Will I Get a Certificate? What Is My Proof of Investment?
You can download a copy of your signed and counter-signed Promissory Note from the WeFunder portal by logging in to your account. This is the official record of the transaction.
When Do I Get My Bottles?
Bottling will begin at bond maturity (March 1, 2027) and, allowing for custom label printing and barrel head engraving where applicable, are expected to be ready within 60 days following that maturity date.
What About the Cash?
Checks and/or electronic payments will be ready for processing and issuance within 15 business days following the maturity date. The full amount of your principal investment and accrued interest, less any bottle conversions elected will be issued.
Can I Roll Over My Investment?
Although not currently part of the plan for this whiskey bond, this may be an option in the future. If offered, you will be notified of the option at the same time notice of upcoming maturity and whiskey conversion election is issued.
If I Invested in the Whiskey Bond, Does That Give Me Shares in the Company?
The whiskey bond is a debt instrument, and you are issued a promissory note for payment of principal and interest. No equity is issued as part of this investment.
More Questions?
Questions regarding your whiskey bond investment can be made to bonds@clevelandwhiskey.com.
How was Cleveland Whiskey originally funded?
Initial funding for Cleveland Whiskey was provided by the founder, Tom Lix as well as a limited number of angel investment groups (voting shares) and Regulation D funding round (non-voting shares).
The Regulation D round had a pre-money valuation of $7.1 million. As Cleveland Whiskey was, at the time, a limited liability company, equity was purchased as “membership units” which for most practical purposes are the same as “stock”. Pricing for the round was pegged at $2.50 per non-voting membership unit.
In 2016, the company conducted its first public equity funding under rules of the newly approved Regulation Crowdfunding (“Reg CF”). The equity round had a $8.6 million pre-money valuation and $2.69 price per non-voting unit. Note that Cleveland Whiskey was one of the very first companies to raise funds on-line under Regulation Crowdfunding.
In 2018, a second Regulation Crowdfunding round was launched with a pre-money valuation of $14.8 million with non-voting membership units priced at $4.31.
As a Limited Liability Company, Cleveland Whiskey LLC provided quarterly financial summaries and “state of the company” narratives to all investors in addition to annual IRS Schedule K-1 reports, the purpose of which was to report each partner’s (member) share of the company earnings, losses, deductions, and credits.
What is Cleveland Whiskey’s legal structure?
On January 1, 2020, the membership units of Cleveland Whiskey, an Ohio Limited Liability Company, were exchanged, on a one-to-one basis, for shares of common stock in the newly formed Delaware Corporation, VISPIRI Inc. Cleveland Whiskey LLC and VISPIRI Inc. merged on this date, with VISPIRI Inc. being the surviving entity, and Cleveland Whiskey LLC being dissolved. Note that VISPIRI Inc. continues to do business as Cleveland Whiskey.
The transaction, which was authorized and approved by both the Cleveland Whiskey Board of Managers and an affirmative vote of shareholders (Class A and Preferred shares, 2,627,998 total voting shares), was made to better position the company for potential acquisition or merger activity, while at the same time both simplifying the investor reporting process and reducing annual reporting costs.
Are we still issuing K-1’s?
As a corporate entity, the company will no longer issue annual K-1’s (the taxable entity is now VISPIRI Inc). So there is nothing for you to claim/file on your personal income tax return. Investors will continue to receive quarterly and year-end financial updates.
Do I get a stock certificate? How much do I own?
In order to avoid unnecessary expense, Membership Units and/or Stock Certificates have not been issued. Ownership of the company is kept in “book” form, meaning that we keep the official record of share ownership. For your own proof of ownership, refer to the signed and counter-signed Subscription Agreements provided during the course of the investment process and which indicate the number of “membership units” purchased. Recall that membership units were exchanged on a one-to-one basis for VISPIRI Inc shares.
Participants in either the 2016 or 2018 Regulation Crowdfunding initiatives through the on-line portal, WeFunder, can find copies of their Subscription Agreement by signing onto their WeFunder account.
To determine your percentage ownership, divide the number of shares you own by 3,296,703 (the number of outstanding shares as of January 1, 2021).
Address or E-Mail Changes
To insure we can provide you with relevant updates and annual tax form, as well as allowing for us to collect information regarding your choices regarding whiskey conversion, barrel head and stave engraving and other information regarding your bonds, it’s critically important that we always have your current and updated e-mail and physical mailing address.
If you change email or physical address, let us know addresschange@clevelandwhiskey.com.
Also be sure that e-mails from clevelandwhiskey.com are not going into your junk mail. You may opt out of our marketing e-mails but please do NOT opt out of the investor mailing list. Mail you receive that is directly related to your investment will come from investor@clevelandwhiskey.com. To ensure that the email makes it to your inbox (not caught in spam) please whitelist this investor email address. (Click for a How to whitelist an email and choose the email you use)
What If I Already Unsubscribed? How Can I Get Back on the List?
If you already unsubscribed from the list, please let us know at the addresschange@clevelandwhiskey.com address and we will walk you through the process. Also be sure that e-mails from clevelandwhiskey.com are not going into your junk mail.
Mail you receive that is directly related to your investment will come from investor@clevelandwhiskey.com. To ensure that the email makes it to your inbox (not caught in spam) please whitelist this investor email address. (Click for a How to whitelist an email and choose the email you use)
Can I Sell My Investor Units (“Shares”)?
As noted in the subscription(s) agreement signed at the time of purchase, these units are considered “restricted securities” under applicable federal Securities Laws. As such, the resale of these investor units is prohibited at this time.
Our goal as a company has always been to grow large enough to be acquired by a larger player in the industry. If and when such a liquidity even occurs, if approved by the Board of Directors and a majority of voting shareholders, all company shares (voting and non-voting) would be sold to the acquiring entity, at which point you would receive a return on your investment. The magnitude of this return will depend on the terms of the sales agreement approved by the company and the cost basis of your original investment.
We recognize that a handful of companies that have sold equity during crowdfunding campaigns are allowing the resale of shares on secondary markets. At this time, we do not think it prudent to incur the additional costs that would be incurred to allow resale of shares, particularly as the secondary markets appear to be thinly traded.
More Questions?
Questions regarding equity investment can be made to equities@clevelandwhiskey.com.
Interested? Let us know.
We do not have a campaign running right now for investment. We have done two Regulation CF Equity campaigns and a Whiskey Bond. If you are interested in hearing about any subsequent investment opportunities, please fill out the short form here. If we decide to do another round you can be first to know.