Analyst Report Written by Mark Bonacci, Chief Financial Analyst

Transcription

1 Analyst Report Written by Mark Bonacci, Chief Financial Analyst Mark Bonacci has worked on Wall Street for several years in various financial services roles and is a selfemployed investment analyst and equity trader Montalvo Spirits Entry into Cannabis Beverage Industry Provides Instant Revenue Stream Published March 4, 2014 Montalvo Spirits, Inc. (OTCQB: TQLA) Research Report THE COMPANY Montalvo Tequila is made with 100% Blue Weber Agave, hand grown and harvested in the Lowlands of Jalisco, Mexico. Hand selected, and picked at the peak of maturity, the Agaves are cooked over the course of two days during an elaborate, slow-cook process, allowing the plants to reach their maximum flavor potential. While two distillations is the industry norm, Montalvo is triple distilled, further eliminating and remaining impurities and ensuring the smoothest, purest tequila. Today, less than 5% of tequila is triple distilled. Immediately following distillation, Montalvo Plata is bottled and Reposado and Añejo are aged in a blend of American and French oak, for four months and 14 months, respectively. During aging, Reposado and Añejo gain layers of complexity, revealing creamy hints of vanilla and chocolate. From start to finish, Montalvo is handcrafted in small batches, with emphasis on quality. Cannabis Beverage Group, Inc. (CBG), a wholly-owned subsidiary of Montalvo Spirits, Inc. (OTCQB: TQLA), will pursue the development, marketing, and distribution of cannabis-based beverages, which includes sodas, teas, energy drinks, liqueurs, and elixirs. CBG is actively seeking widely legal, non-thc containing cannabis beverages through the development of new brands as well as acquisition, partnership, or distribution arrangements with brands that are currently in the market. In addition, CBG has begun gathering regulatory information regarding the potential partnership or acquisition of properly licensed companies in the medical marijuana beverage industry. CBG has an operating website, that is currently selling over twenty products online. CBG hit the ground running with this website. When it was announced, consumers could go right to the website and start buying. Too often, the announcements made in press releases take too long to come to fruition.

2 RECENT NEWS MOORPARK, CA, Apr 30, 2014 (Marketwired via COMTEX) -- Montalvo Spirits, Inc., announced today that its wholly-owned subsidiary, Cannabis Beverage Group, Inc., has launched a fully functional ecommerce website ( to initially provide a variety of hemp based products. The site is now fully operational and has begun receiving and processing orders. "We are extremely excited about the launch of cannabisbeveragegroup.com and the initial products we are offering," commented Alex Viecco, CEO of Montalvo. "We hope to grow our product base through additional wholesale distribution agreements as well as the development of our own products," added Viecco. The site is initially offering over 20 products; including hemp protein shake powder, hemp seeds, hemp oil, and hemp milk, which are sourced from a variety of leading suppliers. The Company plans to continuously add new products and new product categories such as energy drinks, teas, and coffees, which contain hemp as a main ingredient. The Company encourages brands looking for distribution of their cannabis products to contact the Company through its website. "This is an important step in the growth of the Company as it signifies an additional revenue stream without significant capital expenditures," said Carlos Gonzalez, Montalvo's Chief Operating Officer. MOORPARK, CA, Apr 24, 2014 (Marketwired via COMTEX) -- Montalvo Spirits, Inc. is proud to announce that Montalvo Tequila was awarded a Gold Medal in the Tequila Blanco category for the 2014 Spirits of the Americas Tasting Competition, held by the IWSC Group. Montalvo Tequila also received medals in the Tequila Reposado and Tequila Anejo categories. "Being awarded a Gold Medal for our Plata and medals for all of our expressions is a wonderful accomplishment for Montalvo Tequila," says Montalvo's CEO Alex Viecco. "We are especially proud of our acknowledgement from such an esteemed panel of judges in a completely blind tasting," added Viecco. "In every competition, Tequila Montalvo's performance proves that it is world-class ultra-premium Tequila. Tequila Montalvo entered the market in recent years and has quickly risen in the ranks, consistently placing among the world's highest-rated Tequilas. For Tequila lovers, if you have not yet given Montalvo a taste, we recommend that you do so. It's hard to improve upon perfection," said Dori Bryant, Event Director for IWSC Group. The Spirits of the Americas Competition took place on March 31st and April 1st, 2014 with the judging panel including such influential figures as Jack Robertiello, Robert Plotkin, David Pickerell and Junior Merino. Internationally recognized industry experts, in a blind tasting, selected which brands were awarded the coveted 2014 Spirits of the Americas Medals. Brands are judged on five essential characteristics: appearance, aromatics, flavor, mouth feel and finish. MOORPARK, CA, Apr 10, 2014 (Marketwired via COMTEX) -- Montalvo Spirits, Inc. producers of awardwinning brand Montalvo Tequila, announced today that it has appointed Southern Wine & Spirits as the exclusive distributor of Montalvo Tequila in the State of Nevada. The Company will begin its distribution efforts in Nevada immediately. Southern Wine & Spirits of America, Inc. is the nation's largest wine and spirits distributor and broker with operations in 35 markets. On a national basis, Southern Wine & Spirits of America, Inc. employs nearly 14,500 team members. "As the largest distributor in the U.S., Southern Wine & Spirits is obviously an outstanding choice as a distribution partner in the State of Nevada," commented Alex Viecco. "We feel that Southern's brand

3 building ability will complement our efforts and we look forward to this next phase of growth of the Montalvo Tequila brand," added Viecco. Montalvo Tequila is in talks to further expand distribution throughout the United States and internationally, with additional wholesaler partnerships expected to be announced over the coming months. FINANCIALs AND SHARE STRUCTURE Montalvo Spirits, Inc. was incorporated on November 18, 2010 under the name of Advanced Cloud Storage, Inc. The Company originally intended to market its planned secure online data storage through its intended website. On December 21, 2012, the Company shareholders voted to amend the Company s Articles of Incorporation to change its name to Montalvo Spirits, Inc. TQLA operates on a FYE of December 31 st. TQLA is a development stage company. The company shows revenue of approximately $35K for FYE 2012 and $135K for FYE The company has not yet been profitable but its cash burn and losses dropped significantly in The Gross Margins on the company sales is running about 67%. On August 29, 2013, the Company entered into a purchase agreement with Lincoln Park Capital Fund, LLC. Lincoln Park agreed to purchase up to $10,050,000 of Company common stock from time to time over a twenty-four month period. Montalvo will control the timing and amount of any sales of common stock to Lincoln Park. On November 13, 2013 the Company sold 100,000 shares of common stock to Lincoln Park at $0.242 per share or $24,200. On November 15, 2013 the Company sold 100,000 shares of its common stock to Lincoln Park at $0.234 per share or $23,400. On December 3, 2013 the Company sold 100,000 shares of its common stock to Lincoln Park at $0.180 per share or $18,000. TQLA has 68,345,012 common shares outstanding as at MANAGEMENT Alex Viecco, CEO and Director: Mr. Viecco brings more than 25 years of financial services experience and expertise to the Company, with a background that includes 12 years of bank management at a leading San Fernando Valley bank. With his expertise in the debt resolution field, Mr. Viecco has been featured in numerous industry publications. Sergio Gonzalez Rivera, Chief Operating Officer and Director: Sergio has spent a good part of his life in Tequila, Mexico learning from his father and uncles all of the intricacies of the art of producing tequila, from picking the perfect Blue Agave Weber plants, to identifying the best time to harvest the plants to give the best yield. Sergio has also served as a Director of Destilidora Huerta Real, S.A. de C.V., a distillery located in Jalisco, Mexico, for the past seven years.

4 Carlos Gonzalez, President and Director: Carlos spent many years with his family learning the art of producing tequila. His particular interest was in harvesting the plants and learning their regional attributes. Carlos has been recognized by the local farmers as an instrumental representative to ensure fair trade in the region. For the past seven years, Carlos has served as President of Destilidora Huerta Real, S.A. de C.V., a distillery located in Jalisco, Mexico. Daniel Cahill, Director of Sales and Director: Daniel has spent the past 12 years on Wall Street, where he has served in senior management positions at several boutique and mid-tier investment banking and venture capital firms, most recently as Managing Director of Point Loma Capital, Inc. CONCLUSION It s refreshing to see a company such as TQLA announce entry into the cannabis beverage market. Investors have seen too many companies announce they are modifying their business model from mining, IT, finance etc. to pursue opportunities in the cannabis space. Now investors have an opportunity to put their money into a company that already makes beverages and works with beverage distribution channels. The company s new website is functional and you can buy products there including the Hemp of the Month Club. The cannabis beverage industry is in its infancy and will only gain traction as more states begin to work towards legalization. Canna Energy Drink, a hemp oil infused energy drink, recently reported 150, 000 units sold in the first 100 days of the product roll-out in just ten states. Further, the next Canna Energy production run is 30% pre-sold. In the medical marijuana space, using beverages as an alternative method to smoking marijuana may allow more people to access the potential health benefits and further treat their ailments. It is my opinion that TQLA shares will continue to trend positively in the near term. These shares traded as high as $.93/share when the company just sold tequila. With a market value of only $13 million TQLA looks like a ground floor investment opportunity.

5 SOURCES (news feed) TQLA Form 10-Q Issued DISCLAIMER Disclosure: I have no positions in any stocks mentioned. I wrote this article myself, it expresses my own opinions and is written in good faith. The compensation I receive is not related to the views and opinions expressed in this research report. I have no business relationship with any company whose stock is mentioned in the article. None of the information or opinions expressed constitutes a solicitation for the purchase or sale of any security. FORWARD-LOOKING DISCLAIMER This report may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forwardlooking in nature and subject to risks and uncertainties. Such forward- looking statements by definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of mentioned company to be materially different from the statements made herein. COMPLIANCE PROCEDURE Content is researched, written and reviewed on a best-effort basis. This document, article or report is written and authored by Mark Bonacci, Chief Financial Analyst. An outsourced research services provider represented by Mark Bonacci, Chief Financial Analyst, provided Small Cap Specialists, LLC this article or report. However, we are only human and are prone to make mistakes. If you notice any errors or omissions, please notify us below. Small Cap Specialists, LLC and BrokerBank Securities, Inc. are not entitled to veto, interfere or alter the articles, documents or report once created and reviewed by the outsourced research provider represented by Mark Bonacci, Chief Financial Analyst. If you wish to have your company covered in more detail by our team, or wish to learn more about our services, please contact us at admin@smallcapir.com. For any urgent concerns or inquiries, please contact us at admin@smallcapir.com. NO WARRANTY OR LIABILITY ASSUMED Small Cap Specialists, LLC and BrokerBank Securities, Inc., is not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. Small Cap Specialists, LLC and BrokerBank Securities, Inc. do not hold any positions in TCPS. Speak Easy Media, LLC has compensated Small Cap Specialists, LLC up to twenty thousand dollars for media services in regards to TQLA. No liability is accepted by Small Cap Specialists, LLC and BrokerBank Securities, Inc. whatsoever for any direct, indirect or consequential loss arising from the use of this document. Small Cap Specialists, LLC and BrokerBank Securities, Inc. expressly disclaims any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Small Cap Specialists, LLC and BrokerBank Securities, Inc. do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice. Small Cap Specialists, LLC is the party responsible for hosting the full analyst report. BrokerBank Securities in the party responsible for issuing the press release and Mark Bonacci, Chief Financial Analyst, is the author of research report. Small Cap Specialists, LLC has compensated Mark Bonacci, Chief Financial Analyst two hundred dollars and fifty dollars for the right to disseminate this report. BrokerBank Securities, Inc. has been compensated one hundred dollars to issue press release by Small Cap Specialists, LLC. Information in this release is fact checked and produced on a best efforts basis by Mark Bonacci, Chief Financial Analyst.