# EDGAR Filing Document

**Accession Number:** 0001888682
**File Stem:** 0001746059-23-000065
**Filing Date:** 2023-3
**Character Count:** 385738
**Document Hash:** 3d1d7e300579487eb2d24c4b0aaed3ed
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001746059-23-000065.hdr.sgml**: 20230313

**ACCESSION NUMBER**: 0001746059-23-000065

**CONFORMED SUBMISSION TYPE**: C

**PUBLIC DOCUMENT COUNT**: 8

**FILED AS OF DATE**: 20230313

**DATE AS OF CHANGE**: 20230313

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Tallgrass Pictures LLC
- **CENTRAL INDEX KEY:** 0001888682
- **IRS NUMBER:** 202551818
- **STATE OF INCORPORATION:** CA

**FILING VALUES:**
- **FORM TYPE:** C
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 020-31975
- **FILM NUMBER:** 23727622

**BUSINESS ADDRESS:**
- **STREET 1:** 710 13TH ST STE 300
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92101
- **BUSINESS PHONE:** (619) 227-2701

**MAIL ADDRESS:**
- **STREET 1:** 710 13TH ST STE 300
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92101

### Attached PDF Documents

**Attachment 1:** `izola4_offmo.pdf`

![img-0.jpeg](img-0.jpeg)

## TRANCHE 3 OFFERING MEMORANDUM

facilitated by

![img-1.jpeg](img-1.jpeg)

# Tallgrass Pictures LLC

## FORM C TRANCHE 3 OFFERING MEMORANDUM

### Purpose of This Form

A company that wants to raise money using Regulation Crowdfunding must give certain information to prospective investors, so investors will have a basis for making an informed decision. The Securities and Exchange Commission, or SEC, has issued regulations at 17 CFR §227.201 listing the information companies must provide. This form - Form C - is the form used to provide that information.

Each heading below corresponds to a section of the SEC’s regulations under 17 CFR §227.201.

### (A) The Company

| Name of Company | Tallgrass Pictures LLC |
| --- | --- |
| State of Organization | CA |
| Date of Formation | 11/15/2004 |
| Entity Type | Limited Liability Company |
| Street Address | 710 13th St Ste 300, San Diego CA, 92101 |
| Website Address | https://www.izolabakery.com/ |

### (B) Directors and Officers of the Company

| Key Person | Jeffrey Brown |
| --- | --- |
| Position with the Company |  |
| Title | Manager |
| First Year | 2005 |

| Key Person | Jeffrey Brown |
| --- | --- |
| Other business experience (last three years) | Founder + Head Baker ( IZOLA, Jun 2020- Present ) - At IZOLA we're changing the way Americans experience bread + croissants, one hot-from- the-oven croissant at a time. Director + Executive Producer ( IZOLA, Oct 1997- May 2020 ) Full Service Commercial Production - Film, Video + Still Photography Reality Television Series Development Narrative Film Development |

| Key Person | Jennifer Chen |
| --- | --- |
| Position with the Company |  |
| Title | Co-Founder |
| First Year | 2020 |
| Other business experience (last three years) | Co-Founder / IZOLA / San Diego, CA March 2020 - Present Helped launch a business at the start of COVID that is currently posting a 307% YoY increase and on track to generate $1M in annual revenue. Key accomplishments: Created and built a system that allows us to have just-in-time inventory (hot-from-the-oven) ready for pre-order pick-up times and walk-in demand. Forecasting methods and strategic assortment planning have allowed us to average 3% food waste vs. the double digits typically seen in the restaurant industry. |

(C) Each Person Who Owns 20% or More of the Voting Power

| Name of Holder | % of Voting Power (Prior to 3rd Tranche Offering) |
| --- | --- |
| Jeffrey Brown | 75.51% |
| Jennifer Chen | 18.87% (Jennifer owned 20% of the voting power of the Company prior to the Tranche 1 portion of this Offering) |

(D) The Company's Business and Business Plan

**The Investment Opportunity - Quick Start Guide**

Jenny and Jeffrey are deeply grateful to the IZOLA Community. We are fortunate to be a beloved hyper-local brand, now developing a path toward becoming a regional and national company that is changing the way America experiences Croissants and Sourdough - through super high-quality products, served hot from the oven, with amazing customer service.

- Where are we now?
- And where are we headed?
- How will investments be used?

**PRESENT:** We have one bakeshop in San Diego where guests drive from LA, fly from Vegas and come from all over San Diego County to get a croissant. We've grown from making 12 croissants a day to 1000, by hand. We still sell out daily and try our best to provide an amazing experience even when we don't have anything left to feed guests. And now we're ready to take the next step.

**FUTURE:** We're building a state-of-the-art dough innovation center and bakeshop called IZOLA Main. It's the beating heart that will feed a dozen IZOLA Bread Cafes throughout Southern California, plus retail and direct-to-consumer channels. It will be powered by technology enhancements like -

- **FOOD TECHNOLOGY:** We are automating our croissant and sourdough production with cutting-edge equipment from the USA, Japan, Germany + the Netherlands. Our tests show the ability to raise our production by 10-20x and improve our quality.
- **OPERATIONS TECHNOLOGY:** Develop scalable, enterprise-grade technology. My beloved Jenny, co-founder, and powerhouse COO, built the IZOLA Operating System (izOS). It tracks every croissant and sourdough loaf on its multi-day journey from production all the way through the bake so it arrives hot from the oven to your plate every time. Now it's time to rebuild our existing software workflow on a more robust and scalable platform.
- **ORDERING TECHNOLOGY:** We want to make it fun and seamless to order hot croissants. One-click for bread and it will point you to the nearest IZOLA where your hot from the oven order will be waiting for you when you arrive.

**WHY?** We want to improve our guest experience, enhance wages and the workplace for our team and lessen our environmental impact while increasing our profit margins and the quality of our Croissants and Sourdough.

**GUIDING PRINCIPLES:** We are Justice Driven. For us, that means taking action on Environmental, Racial, Sexual Orientation, Economic, and Gender Justice. It's in IZOLA's DNA...so much so that we added it to our Operating Agreement.

### **JENNY AND JEFFREY'S HINTS FOR NAVIGATING IZOLA'S EQUITY PORTAL**

- Visit the "Data Room" link above. It's a great place to:
  - Check out "The Numbers!"
  - Review risks for investors
  - Read important information about the offering. In particular, I recommend you read the following very, very carefully:
    - Offering Memorandum
    - Investor Agreement
  - Learn how IZOLA is structured: Click the "Operating Agreement" button.
- WHAT DOES YOUR INVESTMENT BUY?
  - Shares of IZOLA. You will own a piece of the company, the same class of stock as Jenny and me.
  - In a nutshell, if our shares increase in value, so will yours. If we fail, we'll both likely lose all our investment.
  - If you invest, you'll join the LLC as a member, though you will have no decision-making authority.
- If you have questions, please post them in the discussion section or call/email me directly at 619-227-2701 or jb@izolabakery.com.
- If you decide to invest, enter the amount above and press the Invest button.
- Thank you for considering joining IZOLA on our journey.

### **OUR MISSION**

IZOLA is changing the way AMERICA thinks about and experiences sourdough bread and croissants.

Ambitious? Absolutely! Doable? Maybe, just maybe with your help.

- Quality: Everything we make is served hot from the oven from the best-tasting ingredients, made with time-honored, multi-day techniques.
- Hospitality: We delight our customers - San Diego's Only Google 4.9 Star Bakery (with 660+ reviews) - check out our reviews, https://rb.gy/f2lp1g
- Justice: We practice environmental, racial, gender, economic, and sexual orientation justice.
- Impact: Similar to Starbucks with coffee, we envision changing the conversation about what is good bread and croissants nationwide.

### **THE PROBLEM**

Bakeries are not keeping up with customer desires.

- Baked hours (or days) before eating: Would you prepare dinner for a loved one at 9am and let it sit on the counter until 6pm, as it got cold and stale?
- Mediocre ingredients: Most bakeries use generic ingredients lacking in flavor and nutrients, with chemical additives to speed production and lower cost.
- Poor customer service: Treated like a transaction? I've felt it, I bet you have too. Not worth it, even if the food is great.

## OUR SOLUTION

We're reinventing the American bakery

- Superior product: The very best tasting ingredients - Organic milk and flour. Free-range eggs. Butter from Normandy. We are automating our 4-day traditional croissant recipe to improve quality and profit margins.
- Elevated hospitality: At IZOLA Bakery all people are seen, heard & valued. Community blossoms, guests linger to eat, talk, and listen to music.
- Hot from the oven: All of our croissants and sourdough bread are served hot from the oven. All day...Life changing. And our processes that support them are built from the ground up to be scalable.

## THE RESULTS

2022 was amazing for IZOLA. Thank you team! Thank you guests! And we achieved it all in a converted 3rd-floor photo studio, with no signs, during COVID, open 4 days per week, through word-of-mouth advertising...A Speakeasy for Sourdough.

- Achieved Revenue of $1,209,711
- IZOLA revenue grew 245% over 2021, growing organically by word of mouth. Even while constrained by the amount of croissants and sourdough we can make (we sell out almost every day).
- We were named #1 bakery in the USA https://tinyurl.com/53t5dw42
- IZOLA shares tips equally among ALL the staff
- We're working toward our Diversity, Equity, and Inclusion Targets. In 2022, our leadership was 37% women, 50% BIPOC, and 25% LGBTQIA+.
- In 2023 IZOLA was certified as a Living Wage Employer.

**A high-production, cutting-edge dough factory with elevated hospitality and unique "show baking" guest experiences.**

- Jeffrey and Jenny purchased a 4790 square foot building and 18,000 sq ft of land in central San Diego with ground floor exposure and parking.
- Working with Heleo Architecture and the City of San Diego to re-energize this corner in City Heights. Restore the existing 50-year-old structure and add an additional building to create a dough factory and inviting community space.
- Fly through the building in 3D: https://tinyurl.com/ycknxec8 (best on a laptop/desktop)
- 100% powered by renewable energy.
- Supports future expansion: 10-20x increased production capacity will supply up to 12 IZOLA Bread Cafes in Southern California, and Hot-From-The-Oven customer experiences via Grocery Stores, Direct to Consumers and Restaurants.
- Unique experience: Guests sit at tables and diner-style counters woven into baking areas. Imagine watching (and smelling) loaves coming out of the oven and croissants being produced on state-of-the-art equipment from around the world.
- Improved efficiency: Lower labor costs, and higher profit margins. Improved guest experiences and IZOLA creates 20+ living wage jobs in the City Heights neighborhood.

## IZOLA: ORIGIN STORY

Jenny and I love pastries and bread warm from the oven...for me, the smells and tastes connect me to my most treasured food and family memories.

In Feb 2020 we were wandering through France in search of the simple, warm, pastries of French legend (and great skiing) when COVID began. As we returned to an anxious San Diego, we could not find hot from the

oven bread or pastries anywhere. That is when we decided to bring joy to our community (and ourselves). So with this simple idea, a Kansas farmer's can-do spirit, and a boatload of naivete, we taught ourselves to bake and turned a century-old photo studio into what would become a top bakery in the USA. I remember IZOLA's first day, June 10, 2020, we lowered 12 croissants in a basket out the 3rd-floor window to socially distanced customers waiting below. After their first bite, we saw their faces smiling up at us and realized we'd found our purpose. From that day until now we have been lifted by the grace of so many people. Starting with our heroic team pictured above.

## **THE TEAM**

**Jennifer Chen, Co-Founder**

### **PROFILE**

Seasoned retail executive with 20 years of experience building multimillion-dollar brands. Consistently delivers double-digit YoY comps through a focus on assortment optimization.

Co-Founder / IZOLA / San Diego, CA

March 2020 - Present

- Helped launch a business at the start of COVID that is currently posting a 384% YoY increase and on track to generate $1M in annual revenue.
- Key accomplishments:
  - Created and built a system that allows us to have just-in-time inventory (hot-from-the-oven) ready for pre-order pick-up times and walk-in demand.
  - Forecasting methods and strategic assortment planning have allowed us to average 3% food waste vs. the double digits typically seen in the restaurant industry.

Associate Director of Merchandising / Brilliant Earth / San Francisco, CA (Remote)

May 2008 - Present (Consultant from 2008-2020)

- Lead the merchandising, visual merchandising, and product development strategy of a company that went public in 2021, growing it from $6.5M to $380M; reported to the Senior Vice of Retail.
- Key accomplishments:
  - Joined the company when it was a team of 7 and now employs over 500.
  - Built merchandising department from the ground floor to a team of 14.
  - Delivered 51% sales growth during the pandemic, generating record profitability.
  - Doubled brick-and-mortar retail locations in the span of a year.
  - Led the merchandising integration of a new cloud-based data visualization software.
  - Established an open-to-buy process, improving in-stock rates, and limited inventory liability.

Senior Merchandise Manager / Provide-Commerce (Red Envelope) / San Diego, CA

Mar 2009 - Mar 2012

- Oversaw over half of the total business

- Key accomplishments:
  - Realigned under-performing categories, cut SKU count in half while posting positive YOY sales comps.
  - Developed a test program for incorporating customer insight
  - Led customization/personalization integration with our two fulfillment centers to ensure holiday readiness.

Buyer / Wal-Mart, Inc / Brisbane, CA

Aug 2005 - Apr 2008

- Managed the online jewelry assortment of the nation’s largest jewelry retailer.
- Key accomplishments:
  - Drove double-digit comps each year on a $20M business.
  - Led annual overseas sourcing and product development trips. Oversaw cost negotiations, product development, and sourcing with domestic and overseas vendors
  - SKU count optimization reduced inventory by 50% while still delivering YoY growth in both sales and GM%.
  - Implemented new product photography requirements resulting in a drop in return rates.
  - Developed a high margin closeout channel which generated an additional $250k+ in annual revenue.
  - Identified and negotiated vendor marketing funds, contributing an additional $100k+ in gross profit annually.
  - Created warehouse tracking procedures to ensure on-time slotting of inventory; worked closely with QC to deliver the lowest inventory defect rate among all jewelry divisions of Wal-Mart, Inc

Jeffrey Brown, Founder

PROFILE

A proven business builder who is passionate about creating fully immersive experiences - from reimagining the bakery industry and serving hot from the oven sourdough and croissants resulting in San Diego's only 5-star bakery to telling Pulitzer-recognized stories through film and photography.

EXPERIENCE

FOUNDER

IZOLA Bakery / San Diego, CA / March 2020 - Present

Reimagined what a bakery could be - handcrafted sourdough and croissants made from the best-tasting ingredients, served hot from the oven all day long, in a welcoming community space.

- Posted 384% YoY growth through word of mouth and a marketing budget of less than $200/month.
- Achieved over 400 five-star reviews on Google through direct customer reach-out campaigns.
- Developed proprietary enterprise resource management solution - IZOLA Operating System - allows us to control the journey for 800 croissants + sourdough each day and bake them just a few minutes before customers eat them.
- Helms a startup that has reached profitability in less than 2 years.

FOUNDER, DIRECTOR AND EXECUTIVE PRODUCER

Tallgrass Pictures / San Diego, CA / October 1997 - March 2020

A hybrid production company that created both films and still photographs. Clients included Adidas, Citibank, Nike, Dolby Creative Services, New York Magazine, and USA Today.

- A full-time staff of 10.
- Generated annual 7 figure revenues.
- Managed the entire production, including creative, talent casting, location, crew, permits, insurance, and payroll.
- Post-production capabilities included ten editing bays, DaVinci Resolve color correction, broadcast calibrated theatre with 100” screen, Dolby 5.1 mixing, broadcast mastering, and nationwide distribution.
- Recipient of multiple ADDY awards.

# PHOTOJOURNALIST

Copley Newspapers + Jacksonville Journal-Courier / May 1992 - September 1997

Covered natural disasters, world sporting events, and global health issues. Work has graced the front page of USA Today, National Geographic, Life Magazine. Jeffrey was a Pulitzer Prize finalist for work documenting the experience of an immigrant crossing the border from Central Mexico to Chicago.

# (E) Number of Employees

The Company currently has 30 employees. The Company may hire or discharge employees in the future to meet its objectives.

# (F) Risks of Investing

A crowdfunding investment involves risk. YOU SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. Please review the Educational Materials for risks that are common to many of the companies on the MainVest platform.

THESE SECURITIES ARE OFFERED UNDER AN EXEMPTION FROM REGISTRATION UNDER FEDERAL LAW. THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THESE SECURITIES ARE EXEMPT FROM REGISTRATION. THE SEC HAS NOT PASSED UPON THE MERITS OF THE SECURITIES OR THE TERMS OF THE OFFERING, AND HAS NOT PASSED UPON THE ACCURACY OR COMPLETENESS OF THE OFFERING DOCUMENTS OR LITERATURE.

THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.

Please refer to Appendix A for additional risks to consider when investing in this offering.

# (G) Target Offering Amount and Offering Deadline

| Target Offering Amount | $100,000 |
| --- | --- |
| Tranche 3 Offering Deadline | March 1, 2024 |

This Offering is divided into three Tranches. Tranche 1 investments in this Offering closed on 6-26-22.

Tranche 2 investments in this Offering closed on 1-31-2022. If the sum of the investment commitments does not equal or exceed the Target Offering Amount as of the Tranche 3 Offering Deadline, no securities will be sold in the Tranche 3 part of this offering. Tranche 3 investment commitments will be canceled, and all Tranche 3 committed funds will be returned. The Company may extend the Tranche 3 Offering Deadline and shall treat such an extension as a material change to the original offer and provide Tranche 3 Investors with notice and opportunity to reconfirm their investment in accordance with Section K of this Memorandum. Company may “rolling close” the Tranche 3 offering at any time and plans to “rolling close” multiple times throughout the Tranche 3 Offering and shall treat such “rolling close” as a material change to the original offer and provide Tranche 3 investors with notice and opportunity to reconfirm their investment in accordance with Section K of the Memorandum.

# **(H) Commitments that Exceed the Target Offering Amount**

| Will the Company accept commitments that exceed the Target Offering Amount? | Yes |
| --- | --- |
| What is the maximum you will accept in this Offering? | $3,900,600 |
| If Yes, how will the Company deal with the oversubscriptions? | We will accept subscriptions on a first-come, first-served basis, subject to Manager’s authority to accept or reject subscriptions in the Manager’s discretion. |

# **(I) How the Company Intends to Use the Money Raised in the Tranche 3 part of the Offering**

# **THE INTENDED USE OF PROCEEDS IS ANTICIPATORY AND MAY BE SUBJECT TO CHANGE**

| USE OF PROCEEDS | Amount (Minimum) | Amount (Maximum) |
| --- | --- | --- |
| Real Estate Acquisition and Improvement | $13,000 | $500,000 |
| Croissant & Sourdough Equipment Upgrade | $22,000 | $2,000,000 |
| Development of Distribution Channels | $24,000 | $500,000 |
| Hiring, Training, and Team Salaries | $11,000 | $200,000 |
| Software Development | $13,000 | $125,000 |
| Cash Reserves | $11,000 | $250,000 |
| Retirement of Senior Debt | $0 | $91,564 |

| Mainvest Compensation* | $6,000 | $234,036 |
| --- | --- | --- |
| TOTAL | $100,000 | $3,900,600 |

*Mainvest fee is variable as described in Section O of this Tranche 3 Offering Memorandum.

The amounts listed are estimates and are not intended to be the exact description of the Company's expenditures. Exact allocation and use of funds may vary based upon legitimate business expenditures and economic factors and are subject to change, based on the sole discretion of the Manager.

#### (J) The Investment Process

To Invest

- Review this Form C and the Campaign Page
- If you decide to invest, enter an amount and press the Invest button on the Campaign Page
- Follow the instructions

TO CANCEL YOUR INVESTMENT

For Tranche 3 investors, send an email to info@mainvest.com no later than 48 hours before the Tranche 3 Offering Deadline or go to the dashboard for your user account to cancel manually. In your email, include your name and the name of the Company.

Other Information on the Investment Process

- Tranche 1 of this offering closed on June 26, 2022. Tranche 2 of this offering closed on January 31, 2023. Tranche 3 Investors may cancel an investment commitment until 48 hours prior to the Offering Deadline.
- MainVest will notify Tranche 3 investors when and if the Target Offering Amount has been raised.
- If the Company reaches the Target Offering Amount before the Offering Deadline, it may close the offering early if it provides notice about the new Offering Deadline at least five business days before such new Offering Deadline, absent a material change that would require an extension of the offering and reconfirmation of the investment commitment.
- If a Tranche 3 investor does not cancel an investment commitment before the 48-hour period before the Tranche 3 Offering Deadline, the funds will be released to the Company upon closing of the Tranche 3 offering and the investor will receive securities in exchange for his or her investment.

For additional information about the investment and cancellation process, see the Educational Materials.

#### (K) Material Changes

In the event the issuer undergoes a material change after the Tranche 3 part of this Offering commences, the Tranche 3 Investor will be notified of such change. The investor will have five (5) business days from the receipt of such notice to reconfirm their investment. IF AN INVESTOR DOES NOT RECONFIRM HIS OR HER INVESTMENT COMMITMENT WITHIN FIVE (5) DAYS OF THE NOTICE OF MATERIAL CHANGE BEING SENT, THE INVESTOR'S INVESTMENT COMMITMENT WILL BE CANCELED, THE COMMITTED FUNDS WILL BE RETURNED, AND THE INVESTOR WILL NOT BE ISSUED ANY OF THE SECURITIES REFERENCED IN THIS OFFERING.

Explanation

A “material change” means a change that an average, careful investor would want to know about before making an investment decision. If a material change occurs after you make an investment commitment but before the Tranche 3 part of the Offering closes, then the Company will notify you and ask whether you want to invest anyway. If you do not affirmatively choose to invest, then your commitment will be canceled, your funds will be returned to you, and you will not receive any securities.

#### (L) Price of the Securities

The Company is offering “securities” in the form of Limited Liability Company Membership Units, which we refer to as “Units”. In Tranche 3 of this offering the Units are being offered at a price per unit of $2.00.

#### (M) Terms of the Securities

##### Overview

The Company is offering “securities” in the form of Limited Liability Company Membership Units which are referred to as “Units.” In the Tranche 3 portion of the Offering, the Units are being sold at a price per Unit of $2.00 and that immediately preceding the Tranche 3 portion of this Offering, there are 12,717,500 Units issued and outstanding. The maximum amount of additional Units that may be sold in the Tranche 3 portion of this Offering is 1,950,300. Each Unit has certain rights, including voting rights, subject to the terms of the Operating Agreement accompanying this Form C in Appendix C.

##### Obligation to Contribute Capital

Once you pay for your Units, you will have no obligation to contribute more money to the Company, and you will not be personally obligated for any debts of the Company. However, under some circumstances, you could be required by law to return some or all of a distribution you receive from the Company.

##### No Right to Transfer

You should plan to hold the Units for a long period of time. The Units will be illiquid (meaning you might not be able to sell them) for at least four reasons:

- • The Operating Agreement may prohibit their sale or other transfer without the Company’s consent.
- • If you want to sell your Units the Company will have the first right of refusal to buy it, which could make it harder to find a buyer.
- • Even if a sale were permitted, there is no ready market for Units, as there would be for a publicly-traded stock.
- • In addition to the restrictions on the transfer of Units in the Operating Agreement, for a period of one year you won’t be allowed to transfer the Investor Shares except (i) to the Company itself, (ii) to a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or (iii) in a public offering of the Company’s shares.

##### Other Classes of Securities

| Name of Security | Revenue Sharing Notes |
| --- | --- |
| Number of Notes Outstanding | 101,900 |

| Describe Voting Rights of These Securities, Including Any Limitations on Voting Rights | N/A |
| --- | --- |
| How the securities being offered to investors in this Offering differ from the Revenue Sharing Notes | Notes are a debt obligation of the Company whereas the Units represent an equity interest. Debt obligations are entitled to regular payment and have liquidation preference in the event of dissolution. |

| Name of Security | LLC Membership Units |
| --- | --- |
| Number of Units Outstanding | 12,717,500 (as of close of the Tranche 2 portion of this Offering) |
| Describe Voting Rights of These Securities, Including Any Limitations on Voting Rights | N/A |
| How the securities being offered to investors in this Tranche 1 Offering differ from the Revenue Sharing Notes and the Tranche 1 Offering of LLC Membership Units. | Revenue Sharing Notes are a debt obligation of the Company whereas the Units represent an equity interest. Debt obligations are entitled to regular payment and have liquidation preference in the event of dissolution. In the Tranche 1 portion of this Offering of LLC Membership Units, the Units were priced at $1.00 per unit. In the Tranche 2 portion of this Offering, the units were priced at $2.00 per unit. |

#### Dilution of Rights

The Company has the right to create additional classes of securities, both equity securities and debt securities (e.g., other classes of promissory notes). Some of these additional classes of securities could have rights that are superior to those of the Units. For example, the Company could issue promissory notes that are secured by specific property of the Company or could issue classes of Units that have superior or preferred rights to the distribution of Company proceeds over those of the holders of Units acquired in the Offering.

#### The People Who Control the Company

Each of these people owns 20% or more of the total voting power of the Company:

| Name of Holder | % of Voting Power (Prior to Offering) |
| --- | --- |
| Jeffrey Brown | 75.51% |
| Jennifer Chen | 18.87% (Jennifer owned 20% of the voting power of the Company prior to the Tranche 1 portion of this Offering) |

### How the Exercise of Voting Rights Could Affect You

The Units sold in the Offering have limited voting rights described in the Operating Agreement and are not entitled to participate in any decisions except those specifically described. Additionally, the Units sold in the Offering will not amount to a majority of equity, meaning that owners of the Units will be subject to the decisions of the holders of a majority of the overall Units and managers of the Company.

The holders of the majority of the Units may decide to take actions which you disagree or else decline to take actions which you believe are in the best interest of the company. Examples may include taking on additional debt, issuing other classes of securities, some of which may have superior rights over your Units, or liquidating the company. Any of these decisions may harm your interests.

### How the Units are Being Valued

The Units for the Tranche 3 portion of this Offering are being valued at $2 per unit. The price of the Unit was set by Company management at the time of filing of this Form C. The purchase price of the Units have been determined primarily by the anticipated capital needs of the Company and bears no relationship to any established criteria of value such as book value or earnings per Unit, or any combination thereof. There has been no independent or professional valuation of the Company for the Offering.

### (N) The Funding Portal

The Company is offering its securities through MainVest, Inc., which is a 'Funding Portal' licensed by the Securities and Exchange Commission and FINRA. MainVest Inc.'s Central Index Key (CIK) number is 0001746059, their SEC File number is 007-00162, and their Central Registration Depository (CRD) number is 298384.

### (O) Compensation of the Funding Portal

Upon successful funding of the Offering, the Funding Portal will receive as the 'Revenue Securement Fee'; 3% of the amount of the Offering raised by Investors who are referred by IZOLA. In-Network Users of the Platform plus 9% of the amount of the Offering raised by Investors referred by Mainvest.

### (P) Indebtedness of the Company

| Creditor | Amount | Interest Rate | Maturity Date | Other Important Terms |
| --- | --- | --- | --- | --- |
| SBA | $317,000 | 3.75% | 10/01/2051 | repayment $1601/month begins 11/26/22 |
| Revenue Sharing Notes | $101,900 |  | 01/01/2031 | 0.31% of revenue until a 1.2x or 1.3x (early investor) return is achieved. |
| Guaranty of loans to 3320 Fairmont LLC relating to funding of 3320 Fairmount Real Estate Purchase and construction of tenant improvements | 2,205,000 |  |  |  |

### (Q) Revenue Share Note Offerings and Securities Sold within the Last Three Years

March 2022 Rule 17CFR 227 (Regulation Crowdfunding) Revenue Sharing Notes: $101,900
Please refer to the company's Form C/U dated June 9th, 2021 for additional disclosures

July 2022 Rule 17CFR 227 (Regulation Crowdfunding) Limited Liability Membership Units: 430,000
Please refer to Appendix F - First Tranche Subscription Agreement for additional information

January 2023 Rule 17CFR 227 (Regulation Crowdfunding) Limited Liability Membership Units: 287,500
Please refer to Appendix H - Second Tranche Subscription Agreement for additional information

(R) Transactions Between the Company and "Insiders"

- In 2022, Jeffrey Brown gifted 20% of his membership units to Jennifer Chen based on a value of $.01 per Unit.
- 3320 Fairmount LLC, a company owned by Brown and Chen, entered into certain loans to borrow up to an aggregate principal amount of $2,005,000 to finance the acquisition and improvement of a property to function as a dough factory and restaurant for IZOLA at 3320-3326 Fairmount Avenue, San Diego, California. The Company (IZOLA), Brown, and Chen are each joint and several guarantors of these loans.
- The Company entered into a lease with 3320 Fairmount LLC, which is owned by Jeffrey Brown and Jennifer Chen, for the lease of the property located at 3320-3326 Fairmount Avenue, San Diego, California for use as a dough factory and restaurant. In addition to the payment of rent, the Company will be funding certain tenant improvements to the property and other property development-related expenses. Please refer to Appendix E -Affiliate Lease, for the specific lease terms.
- The Company is currently paying to the Manager (co-founder Jeffrey Brown) compensation of $16.30 per hour. The Company is also paying compensation to Jennifer Chen (co-founder) of $16.30 per hour for her services as an executive of the Company. It is anticipated that such compensation may be adjusted from time to time (and may be changed from per hour compensation to an annual salary with benefits) based on the success of IZOLA, market conditions, compensation paid to others for similar services, and other factors, as determined by Manager in his good faith discretion.
- The Company has agreed to pay Jeffrey Brown (Manager and co-founder) and Jennifer Chen (executive and co-founder) performance bonuses of up to $195,000 in the aggregate. The Manager shall determine the final amount and timing of the bonus payments based on the Company's ability to pay the performance bonuses as determined by Manager, in Manager's sole good faith discretion, provided that the total of the performance bonuses both to Brown and Chen shall not exceed $195,000 in the aggregate.

(S) The Company's Financial Condition

Historical milestones

IZOLA has been operating since June 2020 and has since achieved the following milestones:

- Opened 1st IZOLA location in San Diego, CA June 2020.
- 2020: Achieved revenue of $135,774.
- 2021: Achieved Revenue $351,183
- 2022: Achieved Revenue of $1,209,711

Historical financial performance is not necessarily predictive of future performance.

(T) The Company's Financial Statements

Please see Appendix B for historical financial statements.

## Pro Forma Income Statement

In order to illustrate its future earning potential, the Company has provided a summary of its 5 year financial forecast. The forecast has been developed by the Company using reasonable best efforts based on their understanding of the industry and market they wish to enter. These constitute forward-looking statements and may not be accurate. Please refer to Section (F) of this Tranche 3 Offering Memorandum for a list of the risks associated with an investment in the Company and utilizing any pro forma provided by the Company for making investment decisions.

|  | Year 1 (2023) | Year 2 | Year 3 | Year 4 | Year 5 |
| --- | --- | --- | --- | --- | --- |
| Gross Sales | $2,400,000 | $5,831,000 | $9,300,200 | $14,498,390 | $25,003,606 |
| Cost of Goods Sold | $1,632,000 | $3,014,627 | $4,715,201 | $6,901,234 | $11,402,644 |
| Gross Profit | $768,000 | $2,816,373 | $4,584,999 | $7,597,156 | $13,600,962 |
| EXPENSES |  |  |  |  |  |
| Non-Controllable | $254,640 | $588,575 | $929,882 | $1,429,742 | $2,182,814 |
| Controllable | $439,920 | $1,185,442 | $1,844,230 | $2,831,536 | $4,883,204 |
| Operating Profit | $73,440 | $1,042,356 | $1,810,887 | $3,335,878 | $6,534,944 |

## (U) Disqualification Events

Neither The Company nor any individual identified by Section 227.503(a) of Regulation Crowdfunding is the subject of a disqualifying event as defined by Section 227.503 of Regulation Crowdfunding.

### Explanation

A company is not allowed to raise money using Regulation Crowdfunding if certain designated people associated with the Company (including its directors or executive officers) committed certain prohibited acts (mainly concerned with violations of the securities laws) on or after May 16, 2016. (You can read more about these rules in the Educational Materials.) This item requires a company to disclose whether any of those designated people committed any of those prohibited acts before May 16, 2016.

## (V) Updates on the Progress of the Offering

To track the investment commitments we’ve received in this Offering, click to see the Progress Bar.

## (W) Annual Reports for the Company

The Company will file a report with the Securities and Exchange Commission annually and post the report on our website no later than 120 days after the end of each fiscal year. It’s possible that at some point, the Company will not be required to file any more annual reports. We will notify you if that happens.

## (X) Our Compliance with Reporting Obligations

The Company has previously raised money using Regulation Crowdfunding, however, has not yet been required to file any annual reports.

# (Y) Other Information Prospective Investors Should Know About

The Issuer may offer “Perks” as a means of showing appreciation to investors for supporting small community businesses. The offering of “Perks” by issuers is done purely on a voluntary basis and have no influence upon the terms of the Offering. As such, Investor “Perks” are not contractual conditions governed by “the Units” and are not enforceable under “the Subscription Agreement”

# Additional Information Included in the Form C

|  | 2021 Audited Financial Statements Summary | 2020 Audited Financial Statements Summary |
| --- | --- | --- |
| Total Assets | $210,734 | $73,421 |
| Cash & Cash Equivalents | $100,204 | $45,353 |
| Accounts Receivable | $0 | $0 |
| Short-term Debt | $66,934 | $8,951 |
| Long-term Debt | $304,392 | $128,029 |
| Revenues/Sales | $351,183 | $135,774 |
| Cost of Goods Sold | $127,633 | $42,169 |
| Taxes Paid (Income Tax) | $0 | $0 |
| Net Income | ($131,065) | ($84,373) |

Jurisdictions in which the Company intends to offer the securities:

AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY, BS, GU, PR, VI, IV

**Attachment 2:** `izola4_appxa.pdf`

# APPENDIX A:  
RISK FACTORS

1

# Risk Factors

## EXHIBIT 1

### CERTAIN RISK FACTORS

In addition to the risk disclosures set forth in the Subscription Agreement and in the offering materials, as supplemented from time to time ('**Offering Materials**'), available to the undersigned on the Tallgrass Pictures LLC ('**Company**') offering profile at https://www.mainvest.com, each purchaser of Units in the Company (referred to herein as '**Investor**' or '**you**,' or collectively as '**Investors**') is urged to carefully consider the risk factors discussed below and to consult its own advisors with respect to the offering of Units by Company (the '**Offering**') prior to making an investment.

The rights and obligations of the Members of the Company are set forth in the Operating Agreement of Tallgrass Pictures LLC ('**Operating Agreement**'). A copy of the Operating Agreement is included as Appendix C of the Offering Materials. Investors are encouraged to review the Operating Agreement and the other Offering Materials before making an investment. Any capitalized terms not defined herein shall have the meanings set forth in the Operating Agreement.

In addition to their own investigation and examination of the Company, the Manager, the Offering Materials, the market and other risks, Investors in the Company should consider, among other things, the following (with the understanding that the inclusion of specific special considerations and risk factors in this Subscription Agreement should not be construed to imply that each area of potential risk has been described in complete detail, or that there are no other special considerations or risk factors that apply to an investment in the Company).

The Company's current business of owning and operating IZOLA artisanal bakeries and the marketing, licensing and sale of products and services using the IZOLA's trade name will be referred to below as 'IZOLA.'

### THE UNITS ARE A SPECULATIVE INVESTMENT; YOU MIGHT LOSE YOUR MONEY

The Company's current business, the development and operation of IZOLA artisanal bakeries, is in the early stages of its development on which to base an evaluation of its business and prospects. Investors in the Company should understand that the market for IZOLA's products and services has not been tested beyond IZOLA's initial retail location and many variables, both anticipated and unanticipated, may affect the success of IZOLA. No assurance can be given as to the ultimate success of IZOLA, as to its ability to generate revenues or as to how soon, if ever, the purchasers of Units may receive a return on their investment.

# RISKS OF UNDERCAPITALIZATION AND ADDITIONAL CAPITAL RAISES

IZOLA currently has a limited sales history. Without robust sales, IZOLA will rely almost entirely on the proceeds from the Offering to fund growth of its operations. The Company anticipates that it will seek to raise additional capital from time to time. A financing may involve incurring debt or selling equity securities to raise money to pay for operating expenses, to implement IZOLA's business strategy or to otherwise maximize the opportunities available to IZOLA. The Company cannot assure Investors that additional financing will be available to IZOLA on commercially reasonable terms, or at all. If the Company raises capital through the sale of equity securities, the percentage ownership of the Members could be diluted. In addition, any new equity securities may have rights, preferences or privileges senior to those of the holders of the Company's outstanding Units at the time of such investment. If the Company is unable to obtain additional financing, its ability to fund its operations and execute its business plan could be materially adversely affected and Investors could lose all or a significant portion of their investment. The Company's inability to adequately fund its business development would also harm its ability to earn revenues.

# LIMITED SERVICES

IZOLA operates with a very limited scope, offering only particular goods and services to customers, making them vulnerable to changes in customer preferences.

# LACK OF ACCOUNTING CONTROLS

Larger companies typically have in place strict accounting controls. Smaller companies typically lack these controls, exposing themselves to additional risk.

# COMPETITION

The market in which the Company operates is highly competitive and could become increasingly competitive with new entrants in the market. IZOLA competes with many other businesses, both large and small, on the basis of products offered, quality, price, location, and customer experience. Changes in customer preference away from IZOLA's core business or the inability to compete successfully against other competitors could negatively affect the Company's financial performance.

# RELIANCE ON MANAGEMENT

As a securities holder, you will not be able to participate in the Company's management or vote on and/or influence any managerial decisions regarding the Company, including decisions relating to IZOLA. Furthermore, if the founders or other key personnel of the Company were to leave the Company or become unable to work, the Company (and your investment) could suffer substantially.

The Company's success will be dependent, in part, upon the services of its senior management, currently Jeffrey Lamont Brown ('Brown') and Jennifer Chen ('Chen'). The Company does not currently have written employment agreements with its senior management. The loss of the services of one or more members of senior management could have a significant adverse effect on the Company's business, operating results and financial condition.

## FINANCIAL FORECASTS RISKS

The financial forecasts provided to Investors by the Company are forecasts by the Company based upon assumption of stable economic conditions and other various assumptions regarding operations. The validity and accuracy of these assumptions will depend in large part on future events over which the Company and the key persons will have no control. Changes in assumptions or their underlying facts could significantly affect the forecasts. To the extent that the assumed events do not occur, the outcome may vary significantly from the projected outcomes. Consequently, there can be no assurance that the actual operating results will correspond to the forecasts provided herein. Additionally, IZOLA is a newly established business and therefore has limited operating history from which forecasts could be projected.

IZOLA's limited operating history makes financial forecasting highly speculative. Because of the speculative nature of such forecasting, future operating results will undoubtedly differ materially from any forward-looking or 'pro forma' forecasts and financial projections which may have been provided to Investors by the Company. Investors are therefore cautioned against relying on any such forward-looking statements or financial projections as a prediction of future results.

## INABILITY TO SELL YOUR INVESTMENT

The law prohibits you from selling your securities (except in certain very limited circumstances) for 12 months after you acquire them. Even after that one-year period, a host of Federal and State securities laws may limit or restrict your ability to sell your securities. Even if you are permitted to sell, you will likely have difficulty finding a buyer because there will be no established market. In addition, the Operating Agreement restricts the transfer of Units. Given these factors, you should be prepared to hold your investment for its full term.

IZOLA anticipates that for the foreseeable future it will retain and reinvest any profits from operations back into the business to fund growth and expansion. Therefore, even if the Company is profitable, it is not likely to make any cash distributions to Investors for some time.

Each Investor will be required to represent that (i) the Units are being acquired for investment and not with a view to distribution or resale, (ii) such Investor understands the Units are not freely transferable and (iii) such Investor must bear the economic risk of the investment for an indefinite period of time because the Units: (a) have not been registered under the Securities Act or applicable state 'Blue Sky' or securities laws; and (b) cannot be sold unless they are subsequently registered or an exemption from such registration is available and such subscriber complies with the other applicable provisions of the Operating Agreement. There will be no

market for the Units and Investors cannot expect to be able to liquidate their investment in case of an emergency. Further, the sale of the Units may have adverse federal income tax consequences (the potential purchasers are strongly advised to seek counsel from his or her tax and financial advisor with respect to an investment in the Company). A Member of the Company will be permitted to assign or sell its interest in the Company only in very limited circumstances, as more fully set forth in the Operating Agreement.

#### **THE COMPANY MIGHT NEED MORE CAPITAL**

The Company might need to raise more capital in the future to fund/expand operations, buy property and equipment, hire new team members, market its services, pay overhead and general administrative expenses, or a variety of other reasons. There is no assurance that additional capital will be available when needed, or that it will be available on terms that are not adverse to your interests as an investor. If the Company is unable to obtain additional funding when needed, it could be forced to delay its business plan or even cease operations altogether.

#### **THE PRICE OF THE UNITS WAS DETERMINED ARBITRARILY**

The purchase price of the Units have been determined primarily by the anticipated capital needs of the Company and bears no relationship to any established criteria of value such as book value or earnings per Unit, or any combination thereof. There has been no independent or professional valuation of the Company for the Offering.

In 2022, Brown gifted 20% of his Units (2,400,000 Units) to Chen based on a value of $.01 per Unit.

The initial round of the Offering closed on July 2, 2022. The price for the Units during the initial round was $1.00 per Unit. The Offering was extended to August 30, 2023 and the price for the Units was increased to $2.00 per Unit, which is twice the sale price of the Units in the initial round of this Offering.

#### **THE INTENDED USE OF PROCEEDS IS ANTICIPATORY AND MAY BE SUBJECT TO CHANGE**

The net proceeds to the Company from the sale of the Units are anticipated to be used as set forth in those certain offering materials (as supplemented or amended from time to time) (the '**Offering Materials**') available to the undersigned on the Company offering profile at https://www.mainvest.com. The Investor understands the use of funds described in the Offering Materials are anticipated uses only and that the Manager retains broad discretion to reallocate the proceeds of the Offering as the Manager deems necessary or appropriate to suit the needs of the Company as circumstances evolve. The failure of the Manager to apply such funds effectively could have a material adverse effect on the Company's business, results of operations and financial condition. The Company currently anticipates that it will retain future earnings, if any, for use in the operation and expansion of the Company's business (and the payment of certain debt) and, therefore, the Company does not anticipate declaring any distributions to Members in the foreseeable future.

# CHANGES IN ECONOMIC CONDITIONS COULD HURT THE COMPANY

Factors like global or national economic recessions, changes in interest rates, changes in credit markets, changes in capital market conditions, declining employment, changes in real estate values, changes in tax policy, changes in political conditions, and wars and other crises, among other factors are unpredictable and could negatively affect the Company's financial performance or ability to continue to operate. In the event the Company ceases operations due to the foregoing factors, it cannot guarantee that it will be able to resume operations or generate revenue in the future.

# NO REGISTRATION UNDER SECURITIES LAWS

The Offering of the Units will not be registered with the Securities and Exchange Commission under the Securities Act or the securities agency of any state, and the Units are being offered in reliance upon an exemption from the registration provisions of the Securities Act and state securities laws ('**Regulation Crowdfunding Exemption**'). Since this is a nonpublic offering and, as such, is not registered under federal or state securities laws, Investors will not have the benefit of review by the Securities and Exchange Commission or any state securities regulatory authority. If the Company should fail to comply with the requirements of the Regulation Crowdfunding Exemption, Investors may have the right, if they so desired, to rescind their purchase of the Units. It is possible that one or more Investors seeking rescission would succeed. If a number of Members were successful in seeking rescission, the Company would face severe financial demands that would adversely affect the Company as a whole and, thus, the investments in the Company by the remaining Members.

# INCOMPLETE OFFERING INFORMATION

Title III of the JOBS Act does not require the Company to provide investors with all the information that would be required in some other kinds of securities offerings, such as a public offering of shares (for example, publicly traded firms must generally provide investors with quarterly and annual financial statements that have been audited by an independent accounting firm). Although Title III does require extensive information, it is possible that Investors in the Company would make a different decision if they had more information.

# LACK OF ONGOING INFORMATION

The Company will be required to provide some information to Investors for at least 12 months following the Offering. However, this information is far more limited than the information that would be required of a publicly-reporting company; and the Company is allowed to stop providing annual information in certain circumstances.

# UNINSURED LOSSES

Although the Company will carry some insurance, the Company may not carry enough insurance to protect against all risks to the business. Additionally, there are some kinds of risks

that are very difficult or impossible to insure against, at least at a reasonable cost. Therefore, the Company could incur an uninsured loss that could damage its business.

## CHANGES IN LAWS

Changes in laws or regulations, including but not limited to zoning laws, environmental laws, tax laws, consumer protection laws, securities laws, antitrust laws, and health care laws, could negatively affect the Company's financial performance or ability to continue to operate. Specifically, any additional regulation on the industry could significantly negatively affect the Company's business.

## CERTAIN FINANCING RISKS REGARDING EXPANSION TO SECOND LOCATION

IZOLA plans to open a second location at 3320 & 3326 Fairmount Avenue, San Diego, CA 92105 (the '**New Location Property**'). 3320 Fairmount LLC ('**Property Owner**'), which is co-owned by Brown and Chen, has acquired the New Location Property. Property Owner and the Company have entered into a lease agreement pursuant to which the Company shall lease the New Location Property for approximately 25 years ('**New Location Lease**'). Property Owner entered into certain loans allowing Property Owner to borrow up to an aggregate principal amount of $2,005,000 to finance the acquisition of the New Location Property and the construction of certain improvements to the New Location Property ('**New Location Financing**'). The Company, Brown, and Chen are each joint and several guarantors of the New Location Financing. If the Company does not generate sufficient revenues to pay the rent under the New Location Lease and the Company is unable to raise additional financing (whether debt or equity) to make the rental payments, then such failure to pay rent may result in a default under the New Location Lease resulting in the loss of the Company's leasehold interest in the New Location Property, as well as liability to the Property Owner for damages under the terms of the New Location Lease. In addition, failure to pay the rent under the New Location Lease may result in the Property Owner not having the resources to pay the loan payments under the New Location Financing which may result in, among other things, a default under the New Location Financing, the foreclosure by the lender of the New Location Property, the termination of the New Location Lease and the Company's leasehold interest in the New Location Property, and a collection proceeding for the unpaid balance of the New Location Financing plus damages against the Company under its joint and several guaranty of the New Location Financing. Any of the foregoing may result in the possible loss by Investors of all or a significant portion of their investment.

## AFFECTS OF NON-COMPLIANCE WITH CURRENT DEH PERMIT

Currently, IZOLA is licensed to sell food to consumers from its current location at 710 13th Street (Ste 300) San Diego, CA, under a Class B Cottage Food Permit issued by the Department of Environmental Health and Quality Food and Housing Division (the '**DEH**'). The Class B Cottage Food Permit requires that a permittee have no more than one full-time equivalent employee (other than owners and their immediate family and household members) and no more than $50,000 in annual revenue. IZOLA currently exceeds those limitations (IZOLA currently has 16 full-time employees and generates approximately $150,000 in monthly

revenue). IZOLA understands that to receive a new permit to accommodate its current business operations, it will have to renovate its kitchen at the current location, which will include, among other things, new flooring, new wall covering, additional plumbing, and a dedicated dishwashing area. IZOLA has submitted renovation plans to the DEH and is awaiting approval. Once approved, IZOLA intends to get bids and suspend operations at the bakery during construction and until the new permit is issued. Since many aspects of the construction and permitting process are outside of IZOLA's control, IZOLA cannot guarantee that the new permit will be issued within a specific amount of time. The new permit does not have revenue or employee headcount limitations.

The DEH could demand immediate compliance with the Class B Cottage Food Permit until the new permit is issued. If that comes to pass, IZOLA may have to reduce the scope of its operations until it is in compliance with the Class B Cottage Food Permit or suspend operations until the renovations are complete and the new permit is issued, which may adversely impact its revenue projections. It is also possible that the renovations and/or securing the new permit may take longer than anticipated, which will also adversely affect its revenue projections. Further, the DEH has the authority to fine IZOLA up to 3x the cost of the new permit or $2,790 total. Management believes that any short-term suspension or reduction in its operations due to the expected time to renovate and receive the new permit, or any monetary penalty related to its non-compliance with the Class B Cottage Food Permit, will not have a material long-term impact on IZOLA's operations. However, this may not be the case if IZOLA is forced to close the bakery or materially reduce its operations for an extended period of time.

#### **CONFLICTS OF INTEREST WITH COMPANIES AND THEIR MANAGEMENT**

The Operating Agreement permits the Company to enter into contracts, agreements, and other business dealings with Members and Affiliates (as defined in the Operation Agreement) ('**Affiliate Transactions**') which contain provisions and conditions which in the aggregate are substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members or Manager ('**Affiliate Transaction Requirements**').

The Company has entered into certain material Affiliate Transactions which are set forth in **Exhibit 2** of Subscription Agreement. These Affiliate Transactions constitute a conflict of interest between Brown, Chen, and Property Owner (which is owned by Brown and Chen), on the one hand, and the Company, on the other hand. While the Company believes that the provisions and conditions of the Affiliate Transactions meet the Affiliate Transaction Requirements considering all of the relevant circumstances, including those relating to the acquisition and financing of the New Location Property, the development of the New Location Property, the leasing market, and the requirements of the Company to successfully pursue its business plan, the terms of the Affiliate Transactions may not be deemed to meet the Affiliate Transaction Requirements if challenged by one or more Members of the Company.

Brown has personally guaranteed an SBA loan made to the Company; the Company, Brown and Chen have jointly and severally personally guaranteed the New Location Financing; and

Brown and Chen may elect to guaranty future loans to the Company (as applicable). As Manager, Brown will have the discretion as to how to allocate the resources of the Company, including whether to pay down debt personally guaranteed by Brown and/or Chen. Brown may cause the Company to pay down this debt instead of using the funds for other business purposes, including business purposes that an Investor may believe is a better use of such funds, such as distributions to Members or investment in sales, marketing or new equipment.

Since the Company and Property Owner are jointly and severally liable under the New Location Financing, Brown's decisions on behalf of the Company may be compromised by his and Chen's financial interest in Property Owner (Brown and Chen currently each have a 50% ownership interest in Property Owner).

The agreements governing the Affiliate Transactions may not address or may leave some discretion to the Company and the Property Owner as to how to address certain issues that may arise from time to time with respect to, among other things, the financing and development of the New Location Property and the operation of IZOLA at the New Location Property. Where such discretion exists, Brown and Chen, as the managing members of Property Owner, may generally make decisions that benefit the New Location Property to the detriment or expense of the Company with respect to the Affiliate Transactions.

Generally, an Investor's interests and the interests of the Company's management should coincide: However, an Investor's interests might be in conflict not only in the areas described above, but in other important areas, including these: An Investor might want the Company to act conservatively to maximize the chances or size of distributions to the Investors, while the Company might prefer to spend aggressively to grow the IZOLA business. An Investor may desire to keep the compensation of managers lower than what the managers believe is fair compensation for their services.

An Investor should thoroughly consider the actual and potential conflicts of interest that exist, and the risks relating thereto, before making an investment in the Company.

#### **FUTURE INVESTORS MIGHT HAVE SUPERIOR RIGHTS**

The Manager has the power, without the vote of the Members, to create classes of membership interests or units having rights, powers, and duties superior to the Units to be purchased by Investors, including, without limitation, the right to be paid before holders of such Units, the right to receive larger distributions than the holders of such Units, or the right to have a greater voice in management than holders of such Units. Such superior rights may, among other things, have a materially adverse effect on the value of the Units purchased an Investor.

Any company whose securities are listed on a national stock exchange (for example, the New York Stock Exchange) is subject to a number of rules about corporate governance that are intended to protect investors. For example, the major U.S. stock exchanges require listed companies to have an audit committee made up entirely of independent members of the board of directors (i.e., directors with no material outside relationships with the Company or

management), which is responsible for monitoring the Company's compliance with the law. The Company will not be required to implement these and other investor protections.

#### **THE COMPANY IS SUBJECT TO THE CONTROL OF THE MANAGER AND THE OWNER OF A MAJORITY OF THE UNITS**

The Company is a 'manager-managed limited liability company' as defined in the California Revised Uniform Limited Liability Company Act, currently codified in the California Corporations Code, Sections 17701.01-17713.13, as the same may be amended from time to time. Manager will have the right to make all day-to-day decisions and most major decisions with respect to the management and operation of the business and affairs of the Company. The Members will have only very limited rights of approval of Company matters as set forth in the Operating Agreement. When Member approval is required under the Operating Agreement a majority of the outstanding Units can generally approve such decisions. As of the date hereof, Brown is the Manager and is also the holder a majority of the Units. As a result, Brown has very broad authority to act on behalf of the Company and minority Members in the Company will have very limited rights to limit or curtail Brown's actions. In addition, while Brown is the Manager of the Company, he may not be removed as the Manager under any circumstances unless a majority of the Units entitled to vote (excluding any Units owned by Brown) establishes, pursuant to a formal judgment by a court of law, that Brown has committed fraud pertaining to the performance of his duties as Manager.

#### **THE BUSINESS PURPOSE OF THE COMPANY INCLUDES PURPOSES THAT MAY NOT BE OPERATING FOR PROFIT**

While the principal business activity and purpose of the Company is the ownership and operation of IZOLA's bread cafes and the marketing, licensing and sale of products and services using the IZOLA's trade name, or any successor trade name, an additional business and purpose of the Company, which may not be operated for profit purposes, is the promotion of social and environmental change by supporting positive business practices, as determined by the Manager, including reducing inequality, lowering poverty levels, creating more sustainability for our environment, and building stronger communities. Accordingly, an investment in the Company may not be suitable for an investor who only wants to invest in a business that has a pure profit motive or who does not share the objectives of the Manager regarding supporting social and environmental change in this manner.

#### **MEMBERS INCLUDING THE MANAGER MAY ENGAGE IN OUTSIDE BUSINESS ACTIVITIES**

The Manager will not be required to devote any fixed amount of time to the affairs of the Company. The Members, including the Manager, are permitted to continue to engage in other business activities and are not obligated to present to the Company or Investors any particular investment or opportunity, even if the opportunity is of a character which, if presented to the Company, could be taken by the Company. As a result, the Manager or Members could divert opportunities away from the Company and reduce the potential returns resulting from the investment.

## **THE UNITS ARE UNCERTIFICATED**

Except as otherwise determined by the Manager, in Manager's discretion, the Units shall be uncertificated and a listing of the registered holders on the books and records of the Company shall be maintained solely on the registrar of the Company's membership interests and, if applicable, in the book-entry account system of any transfer agent appointed by the Company.

## **DISPUTES RELATING TO THE UNITS AND OPERATING AGREEMENT TO BE ARBITRATED**

In most circumstances, binding arbitration shall constitute the sole and exclusive remedy for the settlement of any dispute or controversy concerning the Operating Agreement and the rights of Investor under the Operating Agreement. The arbitration proceeding will be conducted in San Diego, California, before a single arbitrator, and administered by JAMS under the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time a demand for arbitration is made. The arbitration process is set forth in further detail in the Operating Agreement.

## **THE COMPANY'S OBLIGATION TO INDEMNIFY THE MANAGER AND MANAGER'S AFFILIATES COULD RESULT IN SIGNIFICANT CHANGES THAT WOULD ADVERSELY AFFECT THE COMPANY'S PERFORMANCE**

Under the Operating Agreement, the Manager and Manager's affiliates are not liable to the Company or to the Members for any act or omission except for acts of misconduct or gross negligence, and under certain circumstances, the Manager and Manager's affiliates will be entitled to indemnification from the Company for certain losses, including, without limitation, on personal guarantees of Company debt. Such indemnification obligations may be material. The indemnification obligations of the Company would be payable from the assets of the Company, including the capital contributions of the Members.

## **RIGHTS TO REQUIRE MEMBERS TO PARTICIPATE IN A SALE TRANSACTION**

Subject to certain limitations as set forth in the Operating Agreement, if Members holding a majority of the outstanding Units elect to consummate a sale of all of the Units or equity interests in the Company to any independent third party, the Operating Agreement obligates the other Members to consent to the proposed transaction and to take all other actions reasonably necessary or desirable to cause the consummation of such proposed transaction. Therefore, you may be required to sell your Units without consent if the owners of a majority of the Company's Units desire to sell their Units

## **COMPANY HAS RIGHTS TO PURCHASE UNITS UNDER CERTAIN CIRCUMSTANCES**

If a Member receives a bona fide written offer from a third party to purchase all or a portion of such Member's Units, the Company has a right of first refusal to purchase such Units as set forth in more detail in the Operating Agreement.

The Company shall have the right, as set forth in more detail in the Operating Agreement, to repurchase the Units of a Member upon the withdrawal, resignation, expulsion, bankruptcy, dissolution, death or occurrence of any other event which terminates the continued membership

of such Member. The purchase price for such Member's Units shall be the fair-market value of such Units as determined by the Manager in Manager's good faith discretion (which means that the Manager may not be required to obtain an independent appraisal or valuation of the Units). The purchase price may be paid in full in cash or in installments as set forth in the Operating Agreement. These purchase terms are favorable to the Company.

#### **SIDE AGREEMENT BETWEEN BROWN AND CHEN**

Brown and Chen have entered into an agreement ('**Side Agreement**') giving each other the option and right to purchase the other's Units ('**Purchase Right**') in the event of the termination of the other's membership with the Company, including the withdrawal, expulsion, bankruptcy, dissolution, or death of such person ('**Dissociation Event**'). The purchase price for such Units is their fair market value based on an appraisal process (if Brown or Chen, or their legal representatives, as applicable, cannot agree on a purchase price). The Operating Agreement generally gives the Manager the right to cause the Company (or an assignee), in Manager's discretion, to acquire a Member's Units with respect to a Dissociation Event at fair market value as determined in the Manager's good faith discretion. If either Brown or Chen suffered a Dissociation Event and the other exercised the Purchase Right with respect to such event, the Side Agreement would result in either Brown or Chen acquiring ownership of the other's Units, and not the Company, and possibly using a different process to determine the fair market value of the Units. If Chen acquires Brown's Units under the Side Agreement, then Chen may acquire enough Units to give her a majority of the outstanding Units, and, in such event, Chen will have sufficient votes to appoint herself the Manager of the Company, giving her substantial control over the Company's operations.

In addition to their business relationship operating IZOLA, Brown and Chen have a personal relationship. If their personal relationship ends (a '**Separation**'), then Brown has the right and option to purchase Chen's Units at fair market value, as agreed by Brown and Chen or, if they cannot agree, determined by an appraisal process. The Operating Agreement generally restricts transfers of Units except in certain circumstances, including transfers of Units approved by the Manager in its sole and absolute discretion. If Brown is the Manager at the time of Separation, then Brown will have the authority to approve the transfer of Units from Chen to Brown under the Side Agreement.

#### **MEMBERS CLAIMS ARE SUBORDINATE TO CREDITORS**

In the event of a dissolution or termination of the Company, the proceeds realized from the liquidation of assets, if any, will be distributed to the Members only after the satisfaction of claims of creditors and the establishment of reserves. Accordingly, the ability of the Members to recover all or any portion of their investment under such circumstances will depend on the amount of the funds so realized and the claims to be satisfied therefrom.

#### **OTHER BUSINESS RISKS**

The current business of the Company is the operation of an artisan bakery, limited to hot-from-the-oven small-batch croissants and wild sourdough. A business primarily focused on

this concept is a relatively untried concept in the United States. The success of the Company's business will in large part be dependent upon the acceptance by the public of this concept. Failure of the concept to find acceptance among local customers would likely result in the failure of the Company. In addition, the Company operates in an industry with significant competition. The Company's business plan does not rely on intellectual property rights owned by the Company, other than with respect to the IZOLA trade name. As a result, there is little intellectual property protection of the Company's business plan, and competitors may develop competitive products that gain market acceptance. Competition could result in lost sales, pricing pressures, reduced margins or the failure of the Company to achieve or maintain market acceptance, any of which could have a material adverse effect on the Company's business, operating results and financial condition.

## **COVID-19 IMPACT**

The ongoing COVID-19 pandemic may impact the Company's ability to generate revenue and/or continue operations. If operations are ceased due to COVID-19 restrictions, the Company cannot guarantee that it will resume operations in the future.

At the time of this Subscription Agreement, the region and world are experiencing an ongoing pandemic caused by the COVID-19 virus. On the advice of public health officials, government authorities and regulators have in the past taken various actions to mitigate the spread of COVID-19, including requiring businesses to implement safety measures (social distancing, mask wearing), encouraging remote working, and ordering the shutdown of 'non-essential' businesses. While many restrictions have been lifted, they will continue to impact business operations for the foreseeable future and new requirements could be imposed at any time. It is impossible to predict what long-term impacts the COVID-19 pandemic or similar public health emergencies may have on the Company or this investment.

## **CERTAIN TAX MATTERS**

The Manager has elected that the Company be classified as a C corporation for Federal income tax purposes. As a C corporation, Company profits will be subject to double taxation (meaning that income earned by the Company is taxed at the entity level and, thereafter, remaining profits distributed to the holders of Units as dividends will be subject to income tax on the personal level). At any time, if deemed advisable by the Manager, the Manager shall have the right to cause (a) the Company to be converted from a limited liability company to a C Corporation, or (b) to merge the Company into a corporation that is per se taxed as a corporation or consolidate with another entity with the resulting entity being a corporation that is per se taxed as a corporation, in each case solely for the purposes of converting to a corporation that is per se taxed as a corporation and not to effect any change in ownership of the Company. If, at some point, the Manager elects that the Company be classified as a partnership, each Member will be subject to income tax each year on his, her or its allocable share of the income or gains (if any) of Company, even if no cash distributions are made by the Company to the Member or cash distributions made by the Company to the Member are not sufficient to pay taxes.

***The foregoing list of Risk Factors is not a complete explanation of the risks involved in an investment in the Company. Investors should consult their own legal, tax and investment advisors before deciding whether to invest in the Company.***

**EXHIBIT 2**

**AFFILIATE TRANSACTIONS DISCLOSURE**

- IZOLA plans to open a second location at 3320 & 3326 Fairmount Avenue, San Diego, CA 92105 (the "**New Location Property**"). 3320 Fairmount LLC ("**Property Owner**"), which is co-owned by Brown and Chen, has acquired the New Location Property. Property Owner and the Company have entered into a Commercial Lease dated as of August 1, 2022, amended by that certain Addendum to Commercial Lease and that certain First Amendment to Commercial Lease, pursuant to which the Company has the right to lease the New Location Property for 25 years (collectively, the "**Affiliate Lease**"). A copy of the Affiliate Lease is included in the Offering Materials. The Affiliate Lease is available to Investors upon request. The Affiliate Lease may be amended from time to time in accordance with the provisions of the Operating Agreement related to Affiliate Transactions.

- Property Owner entered into certain loans allowing Property Owner to borrow up to an aggregate principal amount of $2,005,000 to finance the acquisition of the New Location Property, the construction of certain improvements to the New Location Property and other specified costs ("**New Location Financing**"). The Company, Brown, and Chen are each joint and several guarantors of the New Location Financing. The Affiliate Lease is subordinate to the lien of the New Location Financing. Certain New Location Financing documents will be made available to Investors upon request.

- Based on the current budget for the construction of tenant improvements on the New Location Property, the funds necessary for such construction are being funded by the proceeds of the New Location Financing and capital provided by the Property Owner. Any tenant improvement costs over the current budget shall be funded by the Company as further set forth in the Affiliate Lease. Any funding of the tenant improvements by the Company will benefit the New Location Property and, therefore, indirectly inure to the benefit of Chen and Brown personally, as co-owners of the Property Owner. Please refer to the use of funds described in the Offering Materials.

- The Operating Agreement of the Company allows the Manager to receive compensation for performing management duties, in such amounts as are determined in good faith by the Manager to be reasonable under the circumstances. The Operating Agreement also

permits the Company to enter into contracts, agreements, and business dealings with Members and Affiliates which contain provisions and conditions which in the aggregate are substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members or Manager.

- The Company is currently paying to the Manager (co-founder Jeffrey Brown) compensation of $16.30 per hour. The Company is also paying compensation to Jennifer Chen (co-founder) of $16.30 per hour for her services as an executive of the Company. It is anticipated that such compensation may be adjusted from time to time (and may be changed from per hour compensation to an annual salary with benefits) based on the success of IZOLA, market conditions, compensation paid to others for similar services, and other factors, as determined by Manager in his good faith discretion
- The Company has agreed to pay Jeffrey Brown (Manager and co-founder) and Jennifer Chen (executive and co-founder) performance bonuses of up to $195,000 in the aggregate. The Manager shall determine the final amount and timing of the bonus payments based on the Company's ability to pay the performance bonuses as determined by Manager, in Manager's sole good faith discretion, provided that the total of the performance bonuses both to Brown and Chen shall not exceed $195,000 in the aggregate.

**Attachment 3:** `izola4_appxb.pdf`

# Tallgrass Pictures, LLC

Financial Statements and Report

December 31, 2021 and 2020

## Table of Contents

| Independent Auditor's Report | 2 |
| --- | --- |
| Balance Sheet | 5 |
| Statement of Income | 6 |
| Statement of Cash Flows | 8 |
| Notes to the Financial Statements | 9 |

![img-0.jpeg](img-0.jpeg)

# TESSERACT ADVISORY GROUP

## Independent Auditor's Report

Jeffrey Brown  
Tallgrass Pictures, LLC  
San Diego, CA

### Report on the Audit of the Financial Statements

#### Opinion

We have audited the financial statements of Tallgrass Pictures, LLC (d/b/a Izola Bakery), which comprise the balance sheets as of December 31, 2021 and December 31, 2020, and the related statements of income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Tallgrass Pictures, LLC as of December 31, 2021 and December 31, 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

#### Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Tallgrass Pictures, LLC and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained

2

is sufficient and appropriate to provide a basis for our audit opinion.

### *Responsibilities of Management for the Financial Statements*

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Tallgrass Pictures, LLC's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

### **Accountant's Responsibility**

Our responsibility is to conduct the review engagements in accordance with *Statements on Standards for Accounting and Review Services* promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion.

*We are required to be independent of Tallgrass Pictures, LLC (the Company) and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our reviews.*

### **Auditor's Responsibilities for the Audit of the Financial Statements**

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud

3

or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Tallgrass Pictures, LLC's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Tallgrass Pictures, LLC's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

#### **Substantial Doubt About the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has experienced losses for the past two years and has relied on owner capital contributions and debt to fund operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding these matters are also described in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our conclusion is not modified with respect to this matter.

Philip Debaugh, CPA

OWINGS MILLS, MD

August 21, 2022

4

# **Tallgrass Pictures, LLC**  
 **Balance Sheet**  
 **As of December 31, 2021 and 2020**

|  | Note | 2021 $ | 2020 $ |
| --- | --- | --- | --- |
| Assets |  |  |  |
| Current Assets |  |  |  |
| Cash and cash equivalents | 1.f | 100,204 | 45,353 |
| Inventories | 2 | 20,176 | - |
| Total Current Assets |  | 120,380 | 45,353 |
| Noncurrent Assets |  |  |  |
| Equipment, net of accumulated depreciation | 3 | 90,354 | 28,068 |
| Total Noncurrent Assets |  | 90,354 | 28,068 |
| Total Assets |  | 210,734 | 73,421 |
| Liabilities & Members' Equity |  |  |  |
| Liabilities |  |  |  |
| Current Liabilities |  |  |  |
| Accounts payable and accrued expenses | 4 | 54,126 | 4,175 |
| Debt, current | 5 | 12,808 | 4,776 |
| Total Current Liabilities |  | 66,934 | 8,951 |
| Noncurrent Liabilities |  |  |  |
| Debt, noncurrent | 5 | 304,392 | 128,029 |
| Total Noncurrent Liabilities |  | 304,392 | 128,029 |
| Total Liabilities |  | 371,326 | 136,980 |
| Members' Equity |  | (160,592) | (63,559) |
| Total Liabilities & Members' Equity |  | 210,734 | 73,421 |

5

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**

# Statement of Income

For the years ended December 31, 2021 and 2020

|  | Note | 2021 $ | 2020 $ |
| --- | --- | --- | --- |
| Revenues | 1.j |  |  |
| Bakery revenue |  | 305,212 | 27,697 |
| Studio rental and production revenue |  | 45,971 | 108,077 |
| Total Revenues |  | 351,183 | 135,774 |
| Cost of Revenues |  |  |  |
| Bakery cost of goods sold |  | 118,230 | 7,879 |
| Production cost of sales |  | 9,403 | 34,290 |
| Total Cost of Revenues |  | 127,633 | 42,169 |
| Gross Profit (Loss) |  | 223,550 | 93,605 |
| Operating Expenses |  |  |  |
| Salaries, benefits and payroll taxes |  | 216,091 | 27,053 |
| Rent |  | 66,475 | 70,223 |
| Advertising and promotion |  | 15,933 | 7,459 |
| Charitable contributions and donations |  | 310 | 170 |
| Communications and information technology |  | 11,835 | 7,167 |
| Insurance expense |  | 10,581 | 7,847 |
| Legal and other professional fees and services |  | 5,303 | 1,715 |
| Meals and entertainment |  | 1,482 | 656 |
| Supplies and equipment |  | 29,964 | 24,967 |
| Repairs and maintenance | 1.k | 11,140 | 9,098 |
| Taxes other than income taxes |  | 9,266 | 4,273 |
| Travel |  | 1,832 | 1,424 |
| Depreciation | 3 | 7,941 | 7,597 |
| Other operating (income) expense |  | 6,241 | 5,489 |
| Total Operating Expenses |  | 394,394 | 175,138 |
| Operating Income (Loss) |  | (170,844) | (81,533) |
| Other Income (Expense) |  |  |  |
| Interest expense |  | (5,768) | (2,840) |
| Other Income | 6 | 45,547 | - |
| Total Other Income (Expense) |  | 39,779 | (2,840) |
| Net Income (Loss) |  | (131,065) | (84,373) |

6

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**  
 Statement of Changes in Members' Equity  
 For the years ended December 31, 2021 and 2020

|  | Additional Paid-In Capital $ | Accumulated Deficit $ | Total Members' Equity $ |
| --- | --- | --- | --- |
| Balance at January 1, 2020 | 294,436 | (273,622) | 20,814 |
| Net income (loss) | - | (84,373) | (84,373) |
| Balance at December 31, 2020 | 294,436 | (357,995) | (63,559) |
| Net income (loss) | - | (131,065) | (131,065) |
| Owner Contributions | 34,032 | - | 34,032 |
| Balance at December 31, 2021 | 328,468 | (489,060) | (160,592) |

7

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**  
 **Statement of Cash Flows (Unaudited)**  
 For the years ended December 31, 2021 and 2020

|  | 2021 | 2020 |
| --- | --- | --- |
|  | $ | $ |
| Cash Flows |  |  |
| Cash Flows From Operating Activities |  |  |
| Net income (loss) | (131,065) | (84,373) |
| Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities |  |  |
| Depreciation and amortization | 7,941 | 7,597 |
| (Gain) from debt extinguishment | (29,534) | - |
| Total Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities | (21,593) | 7,597 |
| (Increase) decrease in operating assets, net of effects of businesses acquired |  |  |
| Inventories | (20,176) | - |
| Increase (decrease) in operating liabilities, net of effects of businesses acquired |  |  |
| Accounts payable and accrued liabilities | 49,951 | 2,171 |
| Net Cash Provided by (Used in) Operating Activities | (122,883) | (74,605) |
| Cash Flows from Investing Activities |  |  |
| Purchase of property, plant, and equipment | (70,227) | (43,090) |
| Cash Flows from Financing Activities |  |  |
| Proceeds from PPP Loan | 19,129 | 10,405 |
| Proceeds from EIDL Disaster Loan | 194,800 | 122,400 |
| Capital Contributions | 34,032 | - |
| Net Cash Provided by (Used in) Financing Activities | 247,961 | 132,805 |
| Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 54,851 | 15,110 |
| Cash, cash equivalents, and restricted cash at beginning of year | 45,353 | 30,243 |
| Cash, Cash Equivalents, and Restricted Cash at End of Year | 100,204 | 45,353 |

8

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# Notes to the Financial Statements

# **Tallgrass Pictures, LLC**

# Notes to the Financial Statements

For the years ended December 31, 2021 and 2020

**1. Summary of significant accounting policies**

**a. Nature of operations**

Tallgrass Pictures, LLC (D/B/A Izola Bakery) (the Company) is a small-batch artisan bakery in San Diego that specializes in croissants and sourdough. The bakery is known for providing their pre-purchased, cooked to order items out of a window to their customers on the street below via a rope-pulled basket. Tallgrass Pictures operated as a film and video production studio from 2005 to March 2020, when COVID19 began. After that time, very little Photo/Video work was completed as the focus was transferred to IZOLA Bakery. IZOLA Bakery remains the focus today.

**b. Basis of accounting**

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") as detailed in the Financial Accounting Standards Board's Accounting Standards Codification. The financial statements have been prepared on the accrual basis of accounting.

**c. Use of estimates**

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

**d. Fair value measurements**

Generally accepted accounting principles define fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and such principles also establish a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):

- Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
- Level 2 - Observable inputs other than quoted prices included within Level 1 that are observable

9

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**

# **Notes to the Financial Statements**

For the years ended December 31, 2021 and 2020

for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.

- Level 3 - Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable.

The fair values of assets approximate their carrying value due to the relatively short periods to maturity. The fair value of the company's long-term debt approximates their carrying value as the terms and conditions are comparable to current market conditions or due in a relatively short period of time.

# **e. Risks and uncertainties**

Beginning the first quarter of 2020, the coronavirus (COVID-19) spread throughout the United States. It is uncertain how the ongoing pandemic may affect the Company's operations in the future. Management believes the company is taking appropriate actions to mitigate the risk of COVID-19. However, it is possible that future events related to the pandemic may have an adverse impact on the Company's financial position, operations and cash-flow.

# **f. Cash and cash equivalents**

Cash and cash equivalents includes short-term investments and highly liquid investments in money market instruments which are carried at the lower of cost and market value with a maturity date of three months or less from the acquisition date. These are valued at cost which approximates market value. At December 31, 2021 and 2020, the Company's cash consisted of bank deposits.

# **g. Inventories**

Inventory is stated at the lower of cost (first-in, first-out) or market. The Company's inventory is constantly monitored for obsolescence. This is based on management's estimates and considers such factors as turnover, technical obsolescence, right of return status to suppliers and price protection offered by suppliers. These estimates are necessarily subject to a degree of measurement uncertainty. The Company did not have any reserves for slow-moving and obsolete inventory at December 31, 2021 and 2020.

# **h. Property, plant and equipment**

10

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**

# **Notes to the Financial Statements**

For the years ended December 31, 2021 and 2020

# **i. Property, plant and equipment**

Property, plant and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property, plant and equipment are capitalized, and minor replacements, maintenance, and repairs that do not extend asset life or add value are charged to expense as incurred. When property, plant and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations for the respective period.

# **ii. Depreciation rates - table format**

Depreciation is provided for using the straight-line method over the estimated useful lives as follows for the major classes of assets:

Machinery, equipment, furniture and fixtures

5 - 7 years

# **i. Income taxes**

The Company is a limited liability company taxed as a pass through entity. The accompanying financials statements do not include a provision, benefit, liability, or refund receivable for federal and state income taxes because the members are taxed individually on their share of the limited liability company earnings.

# **j. Revenue recognition**

The Company generates revenue from its sale of finished goods and services and records revenue in accordance with ASC Topic 606, 'Revenue from Contracts with Customers' which establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to performance obligations in the contract; and 5) recognize revenue as the performance obligation is satisfied.

11

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**  
Notes to the Financial Statements  
For the years ended December 31, 2021 and 2020

The Company's revenue from its bakery is derived from sales at its location and is recognized at the time of sale. The Company recognizes revenue from production services and studio rental once the services have been delivered.

# **k. Repair and maintenance**

Routine repairs and maintenance are expensed as incurred. Improvements and major repairs, which extend the useful life of an asset, are capitalized and depreciated.

# **l. Comprehensive income**

The Company does not have any comprehensive income items other than net income.

# **2. Inventories**

Inventories consists of the following:

|  | 2021 $ | 2020 $ |
| --- | --- | --- |
| Finished Goods | 20,176 | - |
| Total | 20,176 | - |

# **3. Property, plant, and equipment**

The historical costs of the Company's property, plant and equipment and related accumulated depreciation balances at December 31 were as follows:

|  | 2021 $ | 2020 $ |
| --- | --- | --- |
| Machinery and equipment | 807,036 | 737,709 |
| Total Accumulated Depreciation | (716,682) | (709,641) |
| Total | 90,354 | 28,068 |

Depreciation expense for the year ended December 31, 2021 and 2020 was $7,941 and $7,597,

12

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**  
 Notes to the Financial Statements  
 For the years ended December 31, 2021 and 2020

respectively.

# **4. Accounts payable and accrued liabilities**

Accounts payable and accrued liabilities consist of the following:

|  | 2021 $ | 2020 $ |
| --- | --- | --- |
| Credit card liabilities | 46,904 | 3,083 |
| Accrued payroll and related benefits | 7,222 | 1,092 |
| Total | 54,126 | 4,175 |

# **5. Long-term debt**

Long-term debt consists of the following:

|  | 2021 $ | 2020 $ |
| --- | --- | --- |
| PPP Loan - refer to Note 6 | - | 10,405 |
| SBA EIDL Disaster Loan | 317,200 | 122,400 |
| Total debt | 317,200 | 132,805 |
| Less: current portion | (12,808) | (4,776) |
| Long-term portion of debt | 304,392 | 128,029 |

On May 26, 2020 the Company received $122,400 in an Economic Injury Disaster Loan ('EIDL' or the 'Loan') from the Small Business Administration ('SBA'). The loan carried an annual interest rate of 3.75% per annum and installment payments, including principal and interest, of $597 monthly beginning 12 months from the date of the note and matures 30 years from the date of the note.

On August 5, 2021, the SBA modified the loan and increased the amount to $317,200. The interest rate was unchanged and the payment increased to $1,601 monthly, beginning 24 months from the date of the original note. The balance of principal interest is due 30 years from the date of the original note.

Principal and interest repayments on long-term debt over the next five years are as follows:

13

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**  
 Notes to the Financial Statements  
 For the years ended December 31, 2021 and 2020

|  | $ |
| --- | --- |
| 2022 | 19,212 |
| 2023 | 19,212 |
| 2024 | 19,212 |
| 2025 | 19,212 |
| 2026 | 19,212 |
| Total | 96,060 |

# **6. Other Income**

Other Income for the year ended December 31, 2021 consists of the following:

|  | 2021 $ |
| --- | --- |
| California Relief Program | 15,000 |
| PPP Loan Debt Forgiveness | 29,534 |
| Credit Card Rewards | 1,013 |
| Total Other Income | 45,547 |

On May 7, 2020 the Company was granted a loan (the “PPP Loan”) in the aggregate amount of $10,405, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Company received a second PPP Loan on March 25, 2021 in the amount of $19,129.

The Loan matures 2 years from the date of the first disbursement and bears interest at a rate of 1.00% per annum, payable monthly commencing 7 months from the date of disbursement. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred.

The Company used the entire Loan amounts for qualifying expenses as described in the CARES Act and the full Loan amount was forgiven in 2021. Accordingly, the Company recognized $29,534 in debt forgiveness in Other Income for the year ended December 31, 2021.

# **7. Commitments and contingencies**

14

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

# **Tallgrass Pictures, LLC**  
Notes to the Financial Statements  
For the years ended December 31, 2021 and 2020

The Company is not currently involved with and does not know of any pending or threatening litigation against the Company.

## 8. Going concern

These financial statements have been prepared on a going concern basis which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. The Company has relied on capital contributions from its owner and debt to cover losses and fund its operations. Those factors and conditions create a substantial doubt about the Company's ability to continue as a going concern for the year following the date the financial statements are available to be issued. Management of the Company has developed a plan to raise capital via a crowdfunding campaign. The ability of the Company to continue as a going concern and meet its obligations as they become due is dependent on management's ability to successfully implement the plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

## 9. Subsequent events

In July 2022, the Company closed on a $430,000 crowdfunding equity round in which 430,000 LLC Membership Units were offered at a $1.00 price per unit and a pre-money valuation of $12,000,000.

The Company also raised $101,900 in the form of revenue sharing notes that require a return of 0.31% of revenue until a 1.3x return is achieved. These notes mature on January 1, 2031.

During 2022, the Company became a guarantor on two loans for the build out of a new facility in San Diego that will contain a dough factory and eatery. The first loan is a $1,160,000 conventional mortgage with a 25 year term and an interest rate fixed at the 20-year Treasury Rate plus 3.35%. The second loan was a $890,000 interim second mortgage that will be paid by an SBA 504 loan. The SBA 504 loan is expected to close by the end of 2022 and will become the permanent second loan. The Company will lease the property from an LLC that is under common ownership with IZOLA Bakery's founder.

Management evaluated all activity of the Company through August 21, 2022 (the issuance date of the financial statements) and concluded that no other subsequent events have occurred that would require recognition in the financial statements or disclosure in the related notes to the financial statements.

15

See independent accountant's review report. The accompanying notes are an integral part of these financial statements.

**Attachment 4:** `izola4_appxc.pdf`

THE UNITS CREATED UNDER THIS OPERATING AGREEMENT HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.

# **OPERATING AGREEMENT  
OF  
TALLGRASS PICTURES, LLC  
a California limited liability company**

This Operating Agreement (“**Agreement**”) of Tallgrass Pictures, LLC, a California limited liability company (the “**Company**”), dated as of June 9, 2022, is made by and among (i) the Company, (ii) those person designated as “**Members**” on the Signature Page attached hereto (the “**Current Members**”), and (iii) such other persons, entities or associations who become members of the Company as expressly set forth in this Agreement (the “**Other Members**”) (the Current Members and the Other Members shall collectively be referred to herein as the “**Members**”). The Members agree as follows:

## ARTICLE 1

### FORMATION AND ORGANIZATION

1.1. **Formation/Operating Agreement.** On November 15, 2004, Articles of Organization for the Company (the “**Articles**”) were filed with the California Secretary of State. This Agreement shall supersede all prior operating agreements relating to the Company and is hereby adopted and approved by the Members pursuant to the California Revised Uniform Limited Liability Company Act, currently codified in the California Corporations Code, Sections 17701.01-17713.13, as the same may be amended from time to time (the “**Act**”). Accordingly, the rights and responsibilities of the Members shall be as provided in the Act, as may be modified by this Agreement. To the extent that the rights or obligations of any Member are different by reasons of any provisions of this Agreement then they would be in absence of such provision, this Agreement shall, to the extent permitted by the Act, control. All capitalized terms used in this Agreement but not specifically defined have the meanings ascribed to them under the Act.

1.2. **Term and Purpose.** The principal business activity and purposes of the Company shall be the ownership and operation of IZOLATM bread cafes and the marketing, licensing and sale of products and services using the IZOLATM trade name, or any successor trade name. An additional business and purpose of the Company, which may not be operated for profit purposes, is the promotion of social and environmental change by supporting positive business practices, as determined by the Manager, including reducing inequality, lowering poverty levels, creating more sustainability for our environment, and building stronger communities. The business and purposes of the Company shall be limited to the foregoing principal business activities and any incidental business necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company. The term of the Company’s existence (the “**Term**”) commenced on

the filing of the Articles and will continue until terminated in accordance with the provisions of this Agreement.

1.3. **Manager Managed LLC.** The Company shall be managed by a manager as defined in the Act (the “**Manager**”). The initial Manager shall be Jeffrey Lamont Brown (“**Brown**”), who shall remain as the Manager except as expressly provided in Section 3.6 of this Agreement.

1.4. **Principal Office.** The principal place of business of the Company will be located at 710 13$^{th}$ Street (#300), San Diego, California 92101, unless and until changed by the Manager to another location, as the Manager deems advisable.

1.5. **Registered Agent.** The registered agent shall be as stated in the Articles. If the registered agent resigns and/or the Manager chooses a different registered agent, the Company shall notify the California Secretary of State. The Manager may also appoint agents for service of process in any other state, district, or jurisdiction in which the Company does business.

1.6. **Qualification to do Business.** The Manager or his designee shall have the authority to execute and file such applications and documents as may be necessary for: (i) the Company to qualify to do business in all jurisdictions in which a qualification is required, and (ii) the Company to comply with any applicable fictitious business name or similar laws.

1.7. **Establishment of Bank Accounts.** The Manager shall establish with a federally insured financial institution (or institutions) one or more accounts for the funds of the Company and shall be authorized to draw against such accounts on behalf of the Company.

1.8. **Title.** Title to any assets acquired by the Company will be held in the name of the Company. The Manager and, to the extent necessary, the Members, shall execute all documents which may be necessary to reflect the Company’s ownership of its assets.

1.9. **Maintenance of Company Minute Book.** The Company shall establish and maintain a Minute Book for the records of the Company which may include the Articles, this Agreement (and any subsequently adopted amendments to this Agreement), and the minutes of all meetings (or written consents in lieu of meetings) of the Members, as well as such other important records of the Company as the Manager deems to be appropriate.

## ARTICLE 2

### ISSUANCE OF UNITS; CAPITALIZATION

2.1. **Authorization of Units.** Ownership interests in the Company will be represented by “**Units**.” Units may be issued for such consideration and on such terms as the Manager may determine in Manager’s discretion, subject to the other provisions hereof. The Members acknowledge that the Manager shall have the power to create classes of Units having those relative rights, powers, and duties as this Agreement may provide (and Manager shall have the authority to amend this Agreement to create such classes in compliance with Section 13.3), including, without limitation, rights, powers and duties superior to other classes of Units (including liquidation, voting, and other preferences). The Company shall maintain at its principal office a Unit register containing the names and addresses of the holders of record of Units. As of the date

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hereof, Units have been issued to the Members as set forth in Exhibit A, attached hereto.

# 2.2. Record Holders; Certificates for Units.

2.2.1. Except as otherwise provided herein, the Units shall be uncertificated and a listing of the registered holders on the books and records of the Company shall be maintained solely on the registrar of the Company's membership interests and, if applicable, in the book-entry account system of any transfer agent appointed by the Company. With respect to any Units, the Company shall be entitled to recognize the person in whose name such Units are registered on the books of the Company as the owner of such Units and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Units on the part of any other person, regardless of whether the Company shall have actual or other notice thereof, except as otherwise provided by law. Without limiting the foregoing, when a person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for another person in acquiring and/or holding Units, the Company shall be entitled to recognize such representative or nominee shall be the record holder of such Units.

2.2.2. If the Manager determines that the issuance of certificates representing the Units (defined below) is desirable, then each Member's Units will be represented by a certificate meeting the requirements of applicable law and otherwise in form and content as deemed appropriate by the Manager. Each certificate issued by the Company (if any) shall contain legends indicating that the Units represented by such certificates are restricted securities under both federal and state law and as otherwise determined by Manager in Manager's discretion.

2.3. Restriction on Transfer of Units. Units may only be transferred in accordance with the terms of this Agreement and each such transfer shall be recorded in the Unit register.

2.4. Sources of Additional Funds. If the Manager determines that the Company has cash needs in excess of available funds, the Company may:

2.4.1. Borrow funds from financial institutions or other third party sources of capital.

2.4.2. Borrow funds from the Manager or an Affiliate of the Manager or from a Member or an Affiliate of a Member. Any such loan shall be an Affiliate Transaction and shall comply with the requirements set forth in Section 5.1 hereof.

2.4.3. Raise additional capital for infusion into the Company, and, to the extent the parties investing such capital are not already Members, to admit such parties as additional members. The Members acknowledge and agree that in admitting new Members, their respective ownership percentage will be subject to dilution. Consistent with the foregoing, the Members shall execute all amendments and modifications to this Agreement as may be necessary or appropriate to effectuate the admission of new Members pursuant to this Section 2.4.3.

2.5. No Liability to Provide Additional Capital. Other than with respect to the purchase of Units, no Member shall be required to make any contribution to the capital of the Company.

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2.6. No Preferred Returns; Limitations on Withdrawals. The respective rights of each Member to share in the capital of the Company, (i) by way of distributions, will be determined by Section 6.1, and (ii) on liquidation, will be determined by ARTICLE 10. Unless expressly set forth in this Agreement, no interest, dividend or preferred return shall be payable with respect to any Member's contribution to the capital of the Company. No Member may withdraw such Member's contributions of capital to the Company or demand and receive property of the Company, except as may be specifically provided in this Agreement or as required by law.

## ARTICLE 3

### MANAGEMENT OF THE COMPANY

3.1. Exclusive Management by the Manager. The Manager shall manage the assets, business, and affairs of the Company. The Manager will make all decisions and perform any and all acts or activities necessary or appropriate to the management of the Company's assets, business, and affairs unless expressly limited by the terms of this Agreement or the Act. Without limiting the generality of the foregoing, the Members grant the Manager all powers which may be necessary or desirable to manage the assets, business, and affairs of the Company by and through the Manager, including the power to exercise on behalf and in the name of the Company all of the powers described in the Act and to do and perform all acts as may be necessary or appropriate to the conduct or furtherance of the business of the Company.

3.2. Members' Authority. The Members shall have no power to participate in the management of the Company except as expressly authorized by this Agreement or the Articles and except as expressly required by the Act in a provision that is not or cannot be altered by this Agreement. Unless expressly and duly authorized in writing to do so by the Manager, no Member shall have any power or authority to bind or act on behalf of the Company in any way, to pledge its credit, or to render it liable for any purpose.

3.3. Performance of Duties. The Manager shall, however, devote such time, effort, and skill as Manager deems appropriate, in Manager's discretion, for the operation of the Company and the management of its affairs. Manager may delegate some or all of its duties to the officers of the Company (see Section 3.8 hereof), in Manager's discretion. The Manager may rely on information, opinions, reports, or statements of one or more officers, employees, or other agents of the Company whom the Manager believes to be reliable and competent, including any attorney, accountant, or other professional.

3.4. Payments to the Manager. The Manager may receive compensation for performing management duties, in such amounts as are determined in good faith by the Manager to be reasonable under the circumstances. Manager shall also be entitled to reimbursement of Manager's reasonable out-of-pocket expenses in connection with the performance of management duties.

3.5. Limited Liability. No person who is a Manager or officer of the Company may be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or otherwise, by virtue of being on the Manager or one of the officers of the Company. Manager shall not be liable to the Company or to any Member for any loss or damage sustained by the Company or any

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Member, unless the loss or damage is the result of fraud, intentional misconduct, or an intentional violation of law by the Manager.

3.6. **Resignation, Withdrawal or Removal of the Manager.** The Manager shall cease to be a Manager, for all purposes, upon the Manager's death, disability or withdrawal as a Manager or if the Manager is removed as a Manager by the vote of a of Members holding a majority of the Units entitled to vote. Upon the occurrence of any of the foregoing events, if a Manager is also a Member, such Manager shall have only the rights and responsibilities of a Member who is not a Manager. If a Manager ceases to be a Manager upon the occurrence of any of the events specified above, a majority of the Units entitled to vote may elect a new Manager, who may but need not be a Member of the Company. Notwithstanding the foregoing, Brown may not be removed as the Manager under any circumstances unless a majority of the Units entitled to vote (excluding any Units owned by Brown) establishes, pursuant to a formal judgment in a court of law, that Brown has committed fraud pertaining to the performance of his duties as Manager under this Agreement (a '**Manager Fraud Claim**') (for purposes of clarity, a Manager Fraud Claim shall not be subject to arbitration pursuant to Section 13.6.2).

3.7. **Acts of Manager as Conclusive Evidence of Authority.** Any note, mortgage, evidence of indebtedness, contract, certificate, statement, conveyance, or other instrument in writing, and any assignment or endorsement thereof, executed or entered into between the Company and any other person, when signed by the Manager, is not invalidated as to the Company by any lack of authority of the Manager in the absence of actual knowledge on the part of the other person that the Manager had no authority to execute the same.

3.8. **Officers.** To facilitate the operation of the Company, the Manager may elect to appoint officers of the Company to carry out such duties as may be delegated to them from time to time by the Manager. Such officers may include a President, a Vice-President, a Chief Financial Officer, a Chief Operations Officer, and a Secretary. The officers shall serve at the pleasure of the Manager, subject to all rights, if any, of an officer under any contract of employment. Any individual may hold any number of offices and no officer need be a member of the Company. The officers may exercise such powers and perform such duties as are specified in this Agreement and as determined from time to time by the Manager. Any delegation pursuant to this Section may be revoked at any time by the Manager.

## ARTICLE 4

### MEMBERSHIP; MEMBER VOTING RIGHTS AND MEETINGS

4.1. **Membership Interests.** A Member's ownership interest in the Company shall be expressed as a number of 'Units,' whether whole or fractional, issued by the Company and as provided for herein. Each Member shall have the rights and powers with respect to such Member's ownership interest solely as set forth in this Agreement.

4.2. **No Liability.** No Member will be personally liable for any debt, obligation, or liability of the Company, whether that debt, obligation, or liability arises in contract, tort, or otherwise, except as provided by law or as specifically provided otherwise herein. All persons dealing with the Company will have recourse solely to the assets of the Company for the payment of the debts, obligations or liabilities of the Company.

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4.3. Voting Rights. Except as expressly provided in this Agreement, the Articles or as otherwise mandated by applicable law (in a provision that is not or cannot be altered by this Agreement), the Members shall have no voting, approval, or consent rights or any rights to call meetings of the Members. Except as otherwise required in this Agreement, a vote, consent or approval of Members holding a majority of the Units entitled to vote shall be sufficient to authorize or approve all matters in which a vote, approval or consent of the Members is required. The vote of any Member who is also the Manager shall be counted for all purposes.

4.4. Meetings. No regular, annual or special or other meetings of the Members are required to be held. If held, written notice of any meeting of Members shall be sent or otherwise given to each Member not less than five (5) nor more than thirty (30) days before the date of the meeting. The notice shall specify the place, date and hour of the meeting and the general nature of the business to be transacted. Notwithstanding anything in the Act to the contrary, a meeting shall be held only when called (a) by the Manager or (b) by Members holding at least ten percent (10%) of the outstanding Units and only with respect to matters on which Members may vote. Any action that may be taken at a meeting of the Members may be taken without a meeting by written consent in accordance with the Act. Any Member may waive notice of or attendance at any meeting, or may attend by telephone or any other electronic communication device.

4.5. Action Without Meeting. Any action that is required or permitted to be taken at any meeting of the Members may be taken without a meeting if written consent setting forth the action to be taken is signed by the Members holding at least the minimum number of Units necessary to authorize or take such action at a meeting at which all the Members entitled to vote thereon were present and voted. Any action taken hereunder shall have the same force as an affirmative vote of the Members. All such consents shall be filed with the Manager or the secretary, if any, of the Company and shall be maintained in the Company records.

4.6. Record Date. In order that the Company may determine the Members of record entitled to notices of any meeting or to vote, or entitled to receive any distribution or to exercise any rights in respect of any distribution or to exercise any rights in respect of any other lawful action, the Manager may fix, in advance, a record date, that is not more than sixty (60) days or less than ten (10) days prior to the date of the meeting and not more than sixty (60) days prior to any other action. If no record date is fixed:

4.6.1. The record date for determining Members entitled to notice of or to vote at a meeting of Members shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held;

4.6.2. The record date for determining Members entitled to give consent to Company action in writing without a meeting shall be the day on which the first written consent is given;

4.6.3. The record date for determining Members for any other purpose shall be at the close of business on the day on which the Manager adopts the resolution relating to such other purpose, or the 60th day prior to the date of the other action, whichever is later;

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4.6.4. The determination of Members of record entitled to notice or to vote at a meeting of Members shall apply to any adjournment of the meeting unless a Manager or the Members who called the meeting fix a new record date for the adjourned meeting, but the Manager or the Members who called the meeting shall fix a new record date if the meeting is adjourned for more than forty-five (45) days from the date set for the original meeting.

## ARTICLE 5

### **TRANACTIONS WITH AFFILIATES; BUSINESS OPPORTUNITIES**

5.1. Transactions with Affiliates. The Members hereby acknowledge and agree that the Company, in the course of its business activities, may enter into contracts, agreements or other business dealings with the Members, the Manager, or Affiliates of the Members or Manager (any such contract, agreement or business dealing, an “**Affiliate Transaction**”) provided all such contracts and agreements with Affiliates contain provisions and conditions which in the aggregate are substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons which are not Affiliates of Members or Manager.

5.2. Outside Businesses. Unless otherwise agreed to in writing with the Company, the Manager, any Member and any Affiliate of any Member or the Manager may engage in or possess an interest in other profit-seeking or business ventures of any kind, nature or description, independently or with others, whether or not the ventures are competitive with the Company and the doctrine of corporate opportunity, or any analogous doctrine, will not apply. No Member, Manager or Affiliate of any Member or the Manager who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Company will have any duty to communicate or offer the opportunity to the Company, and will not be liable to the Company or to any Member for breach of any fiduciary or other duty by reason of the fact that such person (or entity) pursues or acquires for, or directs the opportunity to another person (or entity) or does not communicate the opportunity or information to the Company. Neither the Company nor any Member, Manager or Affiliate of the foregoing will have any rights or obligations by virtue of this Agreement or the relationship created hereby in or to the independent ventures or the income or profits or losses derived therefrom, and the pursuit of the ventures, even if competitive with the activities of the Company, will not be deemed wrongful or improper.

## ARTICLE 6

### **DISTRIBUTIONS**

6.1. Distributable Cash. When and as determined by Manager in Manager’s discretion, Distributable Cash shall be distributed to the Members pro rata in proportion to their holdings of Units or, if there are classes of Units, then each Unit shall receive distributions pro rata based on the class of such Units. For purposes of this Agreement, “**Distributable Cash**” means the amount of cash or other property the Manager deems available for distribution to the Members, in Manager’s sole discretion, taking into account all current, future, and reasonably anticipated Company debts, liabilities, and obligations and amounts that the Manager deems necessary to place into reserves (a) for future claims, debts, liabilities, and obligations with respect to the Company’s business, and (b) to reinvest in the business of the Company to facilitate future growth. All distributions will be made only to the persons who, according to the books and records of the

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Company, are the holders of record of the Units in respect of which such distributions are made on the actual date of distribution. Neither the Company nor the Manager shall incur any liability for making distributions in accordance with this ARTICLE 6.

6.2. Form of Distribution. A Member, regardless of the nature of the Member's contribution to the capital of the Company, may not demand or receive distributions from the Company in any form other than money. No Member may be compelled to accept from the Company a distribution of any asset in kind in lieu of a distribution of money being made to other Members. Except as provided in ARTICLE 10, on dissolution and the winding up of the Company, no Member may be compelled to accept a distribution of any asset in kind.

6.3. Restriction on Distributions. No distribution may be made if, after giving effect to the distribution, the Company would not be able to pay its debts as they become due in the usual course of business.

6.4. Return of Distributions. Except for distributions made in violation of the Act or this Agreement, no Member is obligated to return any distribution received from the Company or pay the amount of any distribution received from the Company for the account of the Company or to any creditor of the Company.

6.5. Withholding. The Company may withhold distributions or portions thereof if it is required to do so by any applicable rule, regulation, or law, and each Member hereby authorizes the Company to withhold from or pay on behalf of or with respect to such Member any amount of federal, state, local or foreign taxes that the Manager determines that the Company is required to withhold or pay with respect to any amount distributable or allocable to such Member pursuant to this Agreement. If at any time the amount required to be withheld exceeds the amount that would otherwise be distributed to the Member to whom the withholding requirement applies, any such excess shall be deemed to be an interest free advance to the Member receiving such excess distributions, payable to the Company from subsequent distributions as made. Any amount withheld with respect to a Member shall be treated as though it had been distributed to that Member under Section 6.1 for all purposes of this Agreement. Each Member will furnish the Manager with such information as may reasonably be requested by the Manager from time to time to determine whether withholding is required, and each Member will promptly notify the Manager if such Manager determines at any time that it is subject to withholding.

## ARTICLE 7

### BOOKS AND RECORDS; ACCOUNTING

7.1. Books and Records. The books and records of the Company shall be maintained at the Company's principal place of business and in accordance with the requirements of Section 17701.13(d) of the Act. The books and records of the Company shall reflect all Company transactions and shall be appropriate and adequate for the Company's business.

7.2. Accounting Decisions. All decisions as to accounting matters, except as otherwise specifically set forth herein, will be made by the Manager who may rely on the advice of accountants as to whether such decisions are in accordance with accounting methods followed for federal income tax purposes.

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7.3. Tax Classification. The Members intend that the Company shall be taxed as a c-corporation (a “**C Corporation**”) subject to taxation pursuant to Subchapter C of Chapter I of the United State Internal Revenue Code of 1986, as amended (the “**Code**”). The Company shall make all elections to be taxed as a C Corporation for federal and state income tax purposes, effective as of the date of this Agreement and at all times thereafter. As a result of such election, the Company and each of the Members shall treat all outstanding Units as stock in a corporation for U.S. Federal income tax purposes and each Member that meets the requirements for applicability of Section 351 of the Code to its acquisition of such stock as having acquired such stock in a transaction governed by Section 351 of the Code. All decisions as to tax elections and accounting matters shall be made by the Manager; provided, that the Company shall make no elections or taken any actions inconsistent with its being treated as a C Corporation for federal and state income tax purposes.

## ARTICLE 8

### TRANSFER OF INTERESTS

#### 8.1. Transfer and Assignment of Interests.

8.1.1. No Member may transfer, assign, exchange, convey, sell, encumber, or in any way alienate (each of the foregoing constituting a “**Transfer**”) any of its Units except as permitted in this ARTICLE 8. Transfers in violation of this Article are void and of no effect. In addition to the requirements set forth in this ARTICLE 8, Transfers of Units may only be made upon receipt of proper Transfer instructions from the registered holder of the Units being Transferred or by such person’s attorney lawfully constituted in writing, and upon compliance with appropriate procedures for transferring Units as provided herein and as also may be required by Manager in Manager’s reasonable discretion. After the consummation of any permitted Transfer, the Unit(s) so Transferred continue to be subject to the terms, provisions, and conditions of this Agreement and any further Transfers must comply with all of the terms, provisions, and conditions of this Agreement, including this Article.

8.1.2. A Member may Transfer Units to (a) the Company or Company’s designee; (b) the parents, siblings, spouse or children of a Member, (c) if such Member is an entity, an Affiliate of such Member, and (d) any other person or entity with the written consent of the Manager, in Manager sole and absolute discretion (each, a “**Permitted Transfer**”). A Member making a Permitted Transfer shall not be required to comply with Sections 8.2 and 8.6, as applicable but must notify the Manager of the Transfer in writing at least ten (10) days prior to making such Transfer, which notice must include proof satisfactory to Manager that the Transfer constitutes a Permitted Transfer (unless Manager, in its discretion, determines to waive such requirement). As used in this Agreement, “**Affiliate**” means as to any person or entity, another person or entity controlling, controlled by or under common control with such person or entity, as determined in good faith by the Manager. If a Member is an entity, such Member shall be deemed to have Transferred its Units if such Member directly or indirectly transfers the power to direct or cause the direction of the management and policies of such Member, whether through the ownership of voting securities or by contract or otherwise.

8.1.3. Upon the occurrence of any Transfer, including a Permitted Transfer, the transferee (the “**Transferee**”) may not become a substitute Member unless the requirements of Section 8.3 are met. Any Transferee who does not become a substitute Member may not vote or

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participate in the management and affairs of the Company or become or exercise any of the rights of a Member, other than to receive, to the extent Transferred, the distributions of money or other property, to which the Transferor Member would be entitled.

8.2. Right of First Refusal. In addition to the other limitations and restrictions set forth in this ARTICLE 8, except with respect to Permitted Transfers or transfers of Units by involuntary means, including due to death and adjudication of incompetency, no Member shall Transfer Units (for purposes of this Section 8.2, the “**Offered Units**”) unless such Member (for purposes of this Section 8.2, the “**Seller**”) first offers to sell the Offered Units pursuant to the terms of this Section 8.2.

8.2.1. No Transfer may be made under this Section 8.2 unless the Seller has received a bona fide written offer (the “**Purchase Offer**”) from a Person (for purposes of this Section 8.2, the “**Purchaser**”) to purchase the Offered Units for a purchase price (for purposes of this Section 8.2, the “**Offer Price**”) denominated and payable in United States dollars at closing or according to specified terms, with or without interest, which offer shall be in writing signed by the Purchaser and shall be irrevocable for a period ending no sooner than the day following the end of the Offer Period, as hereinafter defined.

8.2.2. Prior to making any Transfer that is subject to the terms of this Section 8.2, the Seller shall give to the Company written notice (the “**Offer Notice**”) which shall include a copy of the Purchase Offer and an offer (the “**Firm Offer**”) to sell the Offered Units to the Company or Company’s designee (the “**Offeree**”) for the Offer Price, payable according to the same terms as those contained in the Purchase Offer, provided that the Firm Offer shall be made without regard to the requirement of any earnest money or similar deposit required of the Purchaser prior to closing, and without regard to any security (other than the Offered Units) to be provided by the Purchaser for any deferred portion of the Offer Price.

8.2.3. The Firm Offer shall be irrevocable for a period (the “**Offer Period**”) ending at 11:59 p.m., local time at the Company’s principal place of business, on the thirtieth (30$^{th}$) day following the day of the Offer Notice.

8.2.4. At any time during the Offer Period, the Offeree may accept the Firm Offer as to all of the Offered Units, by giving written notice of such acceptance to the Seller. If the Offeree does not accept the Firm Offer as to all of the Offered Interest during the Offer Period, the Firm Offer shall be deemed to be rejected in its entirety.

8.2.5. If the Firm Offer is accepted, the closing of the sale of the Offered Units shall take place within sixty (60) days after the Firm Offer is accepted or, if later, the date of closing set forth in the Purchase Offer. The Seller and Offeree shall execute such documents and instruments as may be necessary or appropriate to effect the sale of the Offered Interest pursuant to the terms of the Firm Offer and this Section 8.2.

8.2.6. If the Firm Offer is not accepted in the manner hereinabove provided, the Seller may sell the Offered Units to the Purchaser at any time within sixty (60) days after the last day of the Offer Period, provided, however, that such sale shall be made on terms no more favorable to the Purchaser than the terms contained in the Purchase Offer and provided, further, that such sale complies with other terms, conditions, and restrictions of this Agreement that are not expressly made

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inapplicable to sales occurring under this Section 8.2. If the Offered Units is not sold in accordance with the terms of the preceding sentence, the Offered Units shall again become subject to all of the conditions and restrictions of this Section 8.2.

8.3. Substitution of Members. A Transferee of Units (including Permitted Transferees) may become a substitute Member only if (i) for any Transfer other than to a Permitted Transferee, the Manager consents in writing, (ii) all securities and tax requirements set forth in this Agreement are met, (iii) the Transferee executes an agreement or other instrument satisfactory to the Manager accepting, adopting, and agreeing to be bound by this Agreement, and (iv) the Transferee pays all reasonable expenses of the Company (including attorneys' fees) incurred in connection with the Transferee's admission as a substitute Member. The admission of a substitute Member does not release the Transferor Member from any liability the Transferor Member may have to the Company or the other Members.

8.4. Further Restrictions on Transfer. In addition to any other restrictions on transfer in this Agreement or at law, no Member may Transfer any of its Units: (a) unless the Units are subsequently registered under the Securities Act of 1933 and any appropriate state securities laws (or unless the Company receives an opinion of counsel satisfactory to the Manager that an exemption from registration is available); or (b) if the Manager determines, in Manager's reasonable and good faith discretion, that the Transfer may have an adverse effect on the Company.

8.5. Rights of Legal Representatives. If a Member who is an individual dies or is adjudged by a court of competent jurisdiction to be incompetent to manage the Member's person or property, the Member's executor, administrator, guardian, conservator, or other legal representative (each, a '**Legal Representative**') may exercise all of the Member's rights for the purpose of settling the Member's estate or administering the Member's property, including any power the Member has under the Articles or this Agreement to give an assignee the right to become a Member. If a Member is a corporation, trust, or other entity and is dissolved or terminated, the powers of that Member may be exercised by the Member's Legal Representative or successor.

8.6. Drag-Along Rights. If the Members holding a majority of the outstanding Units ('**Majority Selling Group**') elect to consummate a sale of all of the Units or equity interests in the Company to any independent third party (each such transaction referred to as a '**Company Unit Sale**'), the Majority Selling Group shall notify the other Members in writing of such Company Unit Sale. Upon request by the Majority Selling Group, the Members will consent to and raise no objections to the proposed transaction, and will take all other actions reasonably necessary or desirable to cause the consummation of such Company Unit Sale on the terms proposed by the Majority Selling Group. The obligations of the Members pursuant to this Section 8.6 with respect to a Company Unit Sale are subject to the following conditions: (x) the consideration payable upon consummation of such Company Unit Sale to all of the Members shall be allocated among the Members according to their ownership of Units, and (y) upon the consummation of the Company Unit Sale, all of the Members shall receive the same form of consideration per Unit, or if there are classes of Units, then each class shall receive the same form of consideration per Unit. Each Member agrees to be bound by agreements with respect to indemnification obligations, amounts paid into escrow, amounts subject to holdbacks or amounts subject to post-closing purchase price adjustments, and agreements to appoint representatives; provided, that any such indemnification, escrow, holdback and adjustment obligations undertaken by any Member (A) shall be proportional to the share of the purchase price paid in connection with

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such Company Unit Sale that is allocable to such Member and (B) shall not exceed the total amount of consideration received by such Member in connection with such Company Unit Sale (except with respect to representations and warranties relating solely to, or covenants entered into solely by, such Member, including representations as to title to Units or any non-compete). To the extent that a Member does not take any actions when requested by the Manager pursuant to this Section 8.6, each such Member hereby constitutes and appoints the members of the Majority Selling Group as such Member's true and lawful attorney-in-fact and authorizes the attorney-in-fact to execute on behalf of such Member any and all documents and instruments which the attorney-in-fact deems necessary and appropriate in connection with the Company Unit Sale. The foregoing power of attorney is irrevocable and is coupled with an interest.

## ARTICLE 9

### CONSEQUENCES OF DISSOCIATION EVENT OF MEMBER

9.1. **Dissociation Event.** The Company shall not dissolve upon the occurrence of a Dissociation Event. If a Member suffers a Dissociation Event, the Dissociated Member shall become an Economic Interest Owner (as defined below) only and shall no longer be entitled to vote or participate in the management or control of the Company or to demand information except as specifically required hereunder with respect to Economic Interest Owners. Notwithstanding any provision of the Act to the contrary, no Member or Dissociated Member shall be entitled to receive any cash or assets from the Company upon the occurrence of a Dissociation Event.

9.2. **Definitions.** As used herein, these terms have the following meanings:

9.2.1. **'Dissociated Member'** shall mean any Member who suffers a Dissociation Event.

9.2.2. **'Dissociation Event'** shall mean with respect to any Member, an event which terminates the continued membership of such Member, including, without limitation, the withdrawal, expulsion, bankruptcy, dissolution, or death of such Member.

9.2.3. **'Economic Interest'** shall mean a Member's right to share in the distributions of the Company's assets pursuant to this Agreement and the Act, but shall not include any other rights of a Member, including, without limitation, the right to vote or participate in the management, or except as provided in the Act, any right to information concerning the business and affairs of the Company.

9.2.4. **'Economic Interest Owner'** shall mean the owner of an Economic Interest who is not a Member.

9.3. **Right of Purchase.** If any Member suffers a Dissociation Event, such Dissociated Member's Units shall be subject to the purchase rights set forth herein. Upon a Dissociation Event, the Dissociated Member or its Legal Representative shall provide written notice to the Manager of the occurrence of a Dissociation Event (**'Dissociation Event Notice'**). At any time after a Dissociation Event, but not later than sixty (60) days after the Manager's receipt of the Dissociation Event Notice, the Company, in the Manager's sole discretion, shall have the right and option to purchase all of the Dissociated Member's Units. To exercise such option, Company

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shall provide written notice to the Dissociated Member or its Legal Representative, as applicable (“**Selling Party**”) of Company’s election to purchase the Dissociated Member’s Units (“**Dissociation Exercise Notice**”). The Manager may assign such purchase right to any person, including Affiliates of the Manager, in Manager’s sole discretion (the Company and any such assignee, the “**Purchasing Party**”). The purchase price (“**Purchase Price**”) shall be the fair-market value of the Dissociated Member’s Units which shall be determined by the Manager in Manager’s good faith discretion. The Purchase Price shall be paid, in the sole discretion of Manager, either (i) entirely in cash, or (ii) in installments, with an initial cash payment toward the Purchase Price not less than twenty percent (20%) of the Purchase Price and the balance of the Purchase Price amortized, and payable, over a term of not more than three (3) years. The deferred balance of the Purchase Price shall be evidenced by a promissory note executed by the Purchasing Party and delivered to the Selling Party at the time of the initial payment toward the Purchase Price. The promissory note (i) shall bear interest at the rate per annum equal to the Bank of America N.T. & S.A. reference rate in effect as of the date of the promissory note, plus one percentage point; (ii) shall require payment of equal quarterly installments of principal and interest until the final payment thereon; (iii) shall expressly permit prepayments without penalty; (iv) shall require acceleration of the entire unpaid balance of principal and interest upon the earlier of any default in the payment of principal or interest thereunder, if such default is not cured within fifteen (15) days after receipt of written notice of default, or upon dissolution of the Company; and (v) otherwise shall contain then commercially reasonable terms and conditions. Notwithstanding the foregoing, under no circumstances shall the interest payable under the note exceed the limitations imposed at such time by applicable law. The closing for the purchase and sale of the Dissociated Member’s Units shall occur at the Company’s principal place of business at 10:00 a.m. no later than ninety (90) days after the Manager’s receipt of the Dissociation Event Notice, unless such day is a weekend or national holiday, in which event, the closing will occur on the next business day. At the closing, the Selling Party shall deliver to the Purchasing Party (in form and substance reasonably acceptable to the Purchasing Party) and a duly executed assignment of Units (with certificate(s) evidencing such Units, if any). Upon request of the Purchasing Party concurrently therewith or at any time and from time to time thereafter, the Selling Member also shall execute and deliver such other documents and instruments as the Purchasing Party determines are necessary or desirable to consummate the closing and to transfer ownership, title and control of the Dissociated Member’s Units to the Purchasing Party. At the closing, the Purchasing Party shall deliver to the Selling Member the cash portion of the Purchase Price in immediately available funds and, as applicable, the promissory note described herein for the Dissociated Member’s Units.

## ARTICLE 10

### DISSOLUTION AND WINDING UP

10.1. Dissolution Events. The Company will be dissolved, its assets disposed of, and its affairs wound up upon the first to occur of the following:

10.1.1. The entry of a decree of judicial dissolution pursuant to Section 17707.03 of the Act;

10.1.2. The sale or other disposition of all or substantially all of the assets of the Company; or

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10.1.3. The written consent to dissolve the Company of the Manager and of the Members holding a majority of the Units entitled to vote.

A Dissociation Event of a Member who is an individual or the dissolution of a Member that is an entity shall not give rise to the dissolution of the Company.

10.2. Winding Up. Upon the dissolution of the Company, the Company's assets shall be disposed of and its affairs wound up.

10.3. Distributions in Kind. Any non-cash asset distributed to one or more Members must first be valued at its fair market value. The amount distributed to each Member receiving an interest in the distributed asset is the fair market value of such interest (net of any liability secured by the asset that such Member assumes or takes subject to). The fair market value of the asset shall be determined by the Manager in good faith.

# 10.4. Order of Payment of Liabilities upon Dissolution.

10.4.1. After determining that all known liabilities of the Company including debts and liabilities to Members who are creditors of the Company, have been paid or adequately provided for, and subject to the provisions of Section 6.5, the remaining assets will be distributed to the Members in accordance with their distributed to the Members pro rata in accordance with their respective Units. The liquidating distributions must be made by the end of the Company's taxable year in which the Company is liquidated or, if later, within ninety (90) days after the date of the liquidation.

10.4.2. The payment of a debt or liability, whether the whereabouts of the creditor is known or unknown, will be deemed to have been adequately provided for if the Company has complied with either of the following: (a) The payment of the debt or liability has been assumed or guaranteed in good faith by financially responsible person(s) or entities, and the provisions, including financial responsibility, was determined in good faith and with reasonable care by the Manager to be adequate at the time of any distribution of the assets hereunder; or (b) the amount of the debt or liability has been deposited by the Company into an account for that purpose. This Section 10.4.2 is not intended to prescribe the exclusive means of making adequate provision for the payment of debts and liabilities as required by the Act. The Manager may make other arrangements reasonably calculated to provide for the payment of debts and liabilities.

10.5. Limitations on Payments Made in Dissolution. Each Member is entitled to look solely at the assets of the Company for the return of any distributions to which such Member is entitled and will have no recourse for the return of the Member's investment or the receipt of distributions to which such Member is entitled hereunder (upon dissolution or otherwise) against the Manager or any other Member, except for fraud, intentional misconduct, or an intentional violation of law.

10.6. Certificate of Cancellation. As soon as possible following the occurrence of any of the events resulting in the dissolution of the Company, the Manager shall execute a Certificate of Dissolution in such form as shall be prescribed by the California Secretary of State and file the Certificate as required by the Act.

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# ARTICLE 11

## INDEMNIFICATION AND INSURANCE

11.1. *Indemnification of Agents*. The Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he, she or it is or was a Member, Manager, advisor, officer, employee or other agent of the Company or that, being or having been such a Member, Manager, advisor, officer, employee or agent, he, she or it is or was serving at the request of the Company as a manager, director, officer, employee or other agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to hereinafter as an “**Agent**”), to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time to time permit. The Company shall be authorized to enter into indemnity agreements from time to time with any person entitled to be indemnified by the Company hereunder, upon such terms and conditions as the Company deems appropriate in its business judgment. The Members acknowledge that certain debt of the Company has been, and may be in the future be, personally guaranteed or cosigned by the Manager, and that any indemnity agreement entered into between the Company and Manager may indemnify Manager for personal liability incurred by Manager with respect to any such Company debt. The Company may defend an Agent with respect to allegations of gross negligence or willful misconduct, but the Company shall have no duty to indemnify an agent in connection with any acts or omissions constituting gross negligence or willful misconduct.

### 11.2. Insurance.

11.2.1. The Company may secure in its own name and at its own expense, key man, life, and/or disability insurance policies upon the life of any of the Members. None of the Members, nor any of their respective family members, heirs, or beneficiaries shall be entitled to the proceeds thereof. Such insurance shall be available to the Company to offset any payments due to any Member under this ARTICLE 11.

11.2.2. The Company shall have the power to purchase and maintain insurance on behalf of the Manager and any Agent of the Company against any liability asserted against such Agent and incurred by such Agent in any such capacity, or arising out of such party’s status as an agent, whether or not the Company would have the power to indemnify such Agent against such liability under the provisions of Section 11.1 or under applicable law.

# ARTICLE 12

## INVESTMENT REPRESENTATIONS; REPURCHASE RIGHT

Each Member (by executing this Agreement, a counterpart hereof, a subscription agreement, a joinder agreement, or other instrument agreeing to be bound by this Agreement) hereby represents and warrants to, and agrees with, the Manager, the other Members and the Company as follows:

12.1. *Investment Due Diligence*. The Member: (a) has received and reviewed all information the Member considers necessary or appropriate for deciding whether to purchase the Units; and (b) has had an opportunity to ask questions and receive answers from the Company and

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its Manager regarding the terms and conditions of purchase of the Units and the business, financial affairs, and other aspects of the Company and has further had the opportunity to obtain all information which it deems necessary to evaluate the investment and to verify the accuracy of information otherwise provided such Member. The Member has had the opportunity to consult with the Member's own professional advisors regarding all legal matters concerning an investment in the Company and the tax consequences of participating in the Company, and has done so, to the extent the Member considers necessary.

12.2. No Representations by the Company. Neither the Manager, any other Member, any agent or any employee of the Company or of the Manager, or any other person has at any time expressly or implicitly represented, guaranteed, or warranted to the Member that the Units may be may freely transferred, that a percentage of profit or amount or type of consideration will be realized as a result of an investment in the Units, that past performance or experience on the part of any of the Manager or its Affiliates or any other person in any way indicates the predictable results of the ownership of the Units or of the overall business of the Company, that any cash distributions from the Company's operations or otherwise will be made to the Members by any specific date or will be made at all, or that any specific tax benefits will accrue as a result of an investment in the Company.

12.3. Investment Intent. The Member is acquiring Units for investment purposes, for the Member's own account only, and not with a view to or for sale in connection with any distribution of all or any part of the Units being purchased. No other person will have any direct or indirect beneficial interest in or right to the Units being purchased.

12.4. Economic Risk. The Member is financially able to bear the economic risk of the Member's investment in the Units, including the total loss of such investment. The Member acknowledges that the purchase of Units is a speculative investment which involves a substantial degree of risk of loss of the Member's entire investment in the Company, that the Member understands and takes full cognizance of the risks related to the purchase of the Units.

12.5. No Registration of Units. The Member acknowledges having been advised that the Units have not been registered under the Securities Act of 1933, or qualified under the any applicable blue sky laws.

12.6. Units are Restricted Securities. The Member understands that the Units are a 'restricted security' under the Securities Act of 1933 in that the Units will be acquired from the Company in a transaction not involving a public offering, and that the Units may be resold without registration under the Securities Act of 1933 only in certain limited circumstances and that otherwise the Units must be held indefinitely.

12.7. No Disposition in Violation of Law. Without limiting the representations set forth above or the other provisions of this Agreement, the Member will not make any disposition of all or any part of the Member's Units which will result in the violation by the Member or by the Company of the Securities Act 1933 or of any other applicable securities laws.

12.8. Restrictions on Transferability. The Member acknowledges that there are substantial restrictions on the transferability of the Units pursuant to this Agreement, that there is

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no public market for the Units and none is expected to develop, and that, accordingly, it may not be possible to liquidate the investment in the Company.

12.9. Repurchase Right. If the Manager determines in good faith that a Member provided the Company with inaccurate information in connection with the Member's investment in the Company, including, without limitation, Company's decision to accept the Member's investment, or if required by any applicable law or regulation related to terrorism, money laundering, and similar activities, the Company may (but shall not be required to) repurchase the Member's Units for an amount equal to the purchase price paid for the Member's Units less any distributions made to the Member pursuant to Section 6.1.

## ARTICLE 13

### MISCELLANEOUS

13.1. No Third-Party Beneficiary Right. The provisions of the Agreement are intended only for the regulation of relations among the Members and the Company. The Agreement is not intended for the benefit of non-Member creditors and does not grant any rights to or confer any benefits on non-Member creditors or any other person who is not a Member except as specifically provided in this Agreement.

13.2. No Interest in Company Property: Waiver of Action for Partition. No Member or Transferee has any interest in specific property of the Company. Without limiting the foregoing, each Member and Transferee irrevocably waives during the term of the Company any right it may have to maintain an action for partition with respect to property of the Company.

13.3. Amendments. Except as provided herein, any amendment to this Agreement or the Articles must be in writing and shall require the approval of the Manager and the Members holding a majority of the Units entitled to vote. Each Member hereby expressly consents and agrees that, whenever in this Agreement it is specified that an action may be taken upon the affirmative vote or consent of less than all of the Members, such action may be so taken upon the concurrence of less than all of the Members and each Member shall be bound by the results of such action, even Members who did not vote for or consent to such amendment. Notwithstanding the foregoing, (a) no amendment to this Agreement may enlarge the obligations of any Member under this Agreement without its consent, and (b) the Manager, without the approval of any Member, may amend any provision of this Agreement, and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to reflect: (i) a change in the name of the Company, the location of the principal place of business of the Company, the registered agent of the Company or the registered office of the Company; (ii) the admission, substitution, withdrawal or removal of Members in accordance with this Agreement; (iii) a change that Manager determines to be necessary or appropriate to qualify or continue the qualification of the Company as a limited liability company under the laws of any state or to ensure that the Company will be taxed as an entity for federal income tax purposes as the Company specifically so designates; or (iv) a change that, in the sole discretion of Manager, it determines does not adversely affect the Members (including adversely affecting the holders of any particular class of Units as compared to other holders of other classes of Units) in any material respect, and either is determined to be (A) necessary or appropriate to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or

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judicial authority or contained in any federal or state statute, or (B) necessary or reasonable to effect the intent of the provisions of this Agreement. Each Member covenants, on its own behalf, and on behalf of its successors, assigns, heirs and personal representatives, to execute and deliver with acknowledgment or affidavit, if required, all documents and writings that may be necessary or appropriate to effectuate amendments pursuant to this Section 13.3.

13.4. Further Assurances. Each party to this Agreement shall execute and deliver all instruments and documents and take all actions as may be reasonably required or appropriate to carry out the purposes of this Agreement.

13.5. Power of Attorney. Each Member, by executing this Agreement, hereby constitutes and appoints the Manager, as such Member's attorney-in-fact, with full power and authority to act in its name and on its behalf in the execution, acknowledgment and filing of documents relating to the Company and its business ('**Power of Attorney**'), including without limitation the following: (a) any amendments to this Agreement (subject to the provisions of Section 13.3 above); (b) any instrument which may be required to be filed by the Company under appropriate state law or by any governmental agency or which the Manager deems advisable to file; and (c) any documents which may be required to be filed by the Company in connection with the admission of substitute or additional Members, or the dissolution and termination of the Company, provided such continuation or dissolution and termination are in accordance with the terms of this Agreement. Each Member further acknowledges that, by executing this Agreement, the Power of Attorney granted to the Manager pursuant to this Section 13.5: (i) is a special power of attorney coupled with an interest, is irrevocable, and shall survive the death or dissolution of the Member, (ii) may be exercised by the Manager either by signing separately as attorney-in-fact for each Member or, after listing all of the Members, executing any instrument by a single signature of the Manager acting as attorney-in-fact for all of them, and (iii) shall survive the delivery of an assignment by a Member of the whole or any portion of its ownership interest in the Company; except that where the assignee of the whole of a Member's Units has been approved by the Manager for admission to the Company as a substitute Member, the Power of Attorney of the assignor shall survive the effective date of such substitution for the sole purpose of enabling the Manager to execute, acknowledge, and file any instrument necessary to effect such substitution.

# 13.6. Governing Law; Dispute Resolution.

13.6.1. Governing Law. This Agreement is governed by and construed in accordance with the laws of the State of California, irrespective of California's choice-of-law principles.

13.6.2. Arbitration. Except where specific performance is permitted by this Agreement or with respect to a Manager Fraud Claim, arbitration constitutes the sole and exclusive remedy for the settlement of any dispute or controversy concerning this Agreement or the rights of the parties to this Agreement, including whether such dispute or controversy is arbitrable. The arbitration proceeding will be conducted in San Diego, California, before a single arbitrator. The arbitration shall be administered by JAMS under the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time a demand for arbitration is made. To the extent there is any conflict between the rules of the JAMS and this arbitration clause, this clause will govern and determine the rights of the parties. The decision of the arbitrator, including but not limited to the determination of the amount of any damages suffered or the right to an injunction, will be exclusive, final, and

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binding on all parties, their heirs, executors, administrators, successors, and assigns, as applicable, and judgment thereon may be entered in any court of competent jurisdiction. The costs of arbitration, including administrative fees, fees for a record and transcript, and the arbitrator's fees, as well as reasonable attorneys' fees will be awarded to the party determined by the arbitrator to be the prevailing party.

13.6.3. Venue and Jurisdiction. Except as provided in Section 13.6.2, all actions and proceedings arising in connection with this Agreement (including a Manager Fraud Claim) must be tried and litigated exclusively in the State and Federal courts located in the County of San Diego, State of California, which courts have personal jurisdiction and venue over each of the parties to this Agreement for the purpose of adjudicating all matters arising out of or related to this Agreement. Each party authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this Section by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices set forth in this Agreement.

13.7. Counterparts/Signatures/Exhibits. This Agreement may be executed in any number of counterparts, each of which is deemed an original and all of which together constitute one document. A signature received via facsimile, e-mail, .pdf or other electronic signature shall be as legally binding for all purposes as an original signature. All exhibits and schedules attached to and referenced in this Agreement are incorporated into this Agreement.

13.8. Time of Essence. Time and strict and punctual performance are of the essence with respect to each provision of this Agreement.

13.9. Interpretation. Whenever the context so requires in this Agreement, all words used in the singular may include the plural (and vice versa) and the word 'person' includes a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity. The terms 'includes' and 'including' do not imply any limitation. No remedy or election under this Agreement is exclusive, but rather, to the extent permitted by applicable law, each such remedy and election is cumulative with all other remedies at law or in equity. The Section headings in this Agreement: (a) are included only for convenience, (b) do not in any manner modify or limit any of the provisions of this Agreement, and (c) may not be used in the interpretation of this Agreement. Each provision of this Agreement is valid and enforceable to the fullest extent permitted by law. If any provision of this Agreement (or the application of such provision to any person or circumstance) is or becomes invalid or unenforceable, the remainder of this Agreement, and the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, are not affected by such invalidity or unenforceability.

13.10. Successors-in-Interest and Assigns. Subject to the restrictions on transferability contained in this Agreement, this Agreement, including any amendment to this Agreement in compliance with Section 13.3, is and shall be binding upon and shall inure to the benefit of the successors-in-interest and assigns of each party to this Agreement.

13.11. Notices. All notices and other communications provided for herein must be in writing and must be delivered by hand or overnight courier service, mailed by certified or registered mail, or e-mailed, (a) if to the Company, to the address of the Company set forth below its name on the Signature Page hereto, or (b) if to a Member, the address of the Member set forth in the Company books and records. Notices sent by hand delivery or overnight courier service, or

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mailed by certified or registered mail, will be deemed to have been given when received (except that, if not given during normal business hours for the recipient, will be deemed to have been given at the opening of business on the next business day for the recipient). Notices by email will be deemed to have been given when sent in accordance with this Section. Each party shall make a reasonable, good faith effort to ensure that it will accept or receive notices to it that are given in accordance with this Section (which shall include the obligation of each Member to designate the Company's email address as a 'safe sender' to avoid email notices being diverted to a spam filter). A party may change its address for purposes of this Section by giving the other party(ies) written notice of a new address in the manner set forth above.

13.12. Waiver. Any waiver of a default or provision under this Agreement must be in writing. No such waiver constitutes a waiver of any other default or provision concerning the same or any other provision of this Agreement. No delay or omission by a party in the exercise of any of its rights or remedies constitutes a waiver of (or otherwise impairs) such right or remedy. A consent to or approval of an act does not waive or render unnecessary the consent to or approval of any other or subsequent act.

13.13. Drafting Ambiguities. Each party to this Agreement has had the opportunity to have its legal counsel review and revise this Agreement. The rule of construction that ambiguities are to be resolved against the drafting party or in favor of the party receiving a particular benefit under an agreement may not be employed in the interpretation of this Agreement or any amendment to this Agreement.

13.14. Entire Agreement. This Agreement (including any a subscription agreement, a joinder agreement, or other instrument agreeing to be bound by this Agreement ) and the Articles constitute the complete and exclusive statement of agreement among the Members and Company with respect to the subject matter herein and therein and replace and supersede all prior written and oral agreements or statements by and among the Members and the Company. No representation, statement, condition or warranty not contained in this Agreement or the Articles will be binding on the Members or the Company or have any force or effect whatsoever. To the extent that any provision of the Articles conflict with any provision of this Agreement, the Articles shall control. For purposes of clarity, this Agreement shall not replace any subscription documents entered into by a Member with respect to an investment in the Company, provided, however, if there is any discrepancy between any of the subscription documents and this Agreement, this Agreement shall control.

13.15. Spousal Consent. As a condition precedent to the admission into membership of each married Member, such Member's spouse, at the request of Manager, shall be required to execute a consent, in a form deemed appropriate by Manager, to be bound in all respects, including as to such spouse's ownership interests, if any, in the Member's Units, to the terms of this Agreement.

13.16. Conversion to Corporate Form. At any time, if deemed advisable by the Manager, the Manager shall have the right, with no action on the part of the Members, to cause (a) the Company to be converted from a limited liability company to a C Corporation, or (b) to merge the Company into a corporation that is per se taxed as a corporation or consolidate with another entity with the resulting entity being a corporation that is per se taxed as a corporation (a '**Conversion**'), in each case solely for the purposes of converting to a corporation that is per se taxed as a

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corporation and not to effect any change in ownership of the Company. Each Member further agrees that the Manager may take, without any action or further authorization of the Members, any and all actions necessary or desirable, in the discretion of the Manager, to effect such conversion, merger or consolidation, including, without limitation, preparing and filing certificates, executing agreements, making necessary or appropriate amendments to this Agreement (including terminating this Agreement or converting this Agreement into a stockholders agreement), converting Units into securities of the C Corporation or disposing of Units. The Manager shall structure the Conversion so that the relative percentage equity interests, relative voting rights and economic positions of the Members immediately prior to the Conversion will be maintained in the Conversion. In connection with the Conversion, the Company shall make or apply for all filings, permits, authorizations, consents and approvals as may be required under applicable state or federal law, or by any administrative agency or commission or other governmental regulatory authority or agency (a “**Governmental Entity**”). Each of the Members agrees to take all actions reasonably requested by the Company in order to obtain any consent, authorization, order or approval of, or any exemption by, any Governmental Entity, including making all filings required to be made or obtained by the Company or such Member in connection with the consummation of the Conversion. It shall be a condition to the consummation of the Conversion, that all filings, permits, authorizations, consents and approvals of Governmental Entities required in connection therewith have been made or obtained.

13.17. Acknowledgement Regarding Company Counsel. With respect to issues related to this Agreement, each Member acknowledges that counsel to the Company has represented the Company only and does not and will not represent any Member in the absence of a clear and explicit agreement to such effect between such Member and Company’s counsel, and without such written agreement Company’s counsel shall owe no duties directly to such Member.

[Signatures on Next Page]

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[SIGNATURE PAGE]

The undersigned have executed this Operating Agreement agreeing to be bound hereby, effective as of the date first written above.

**MEMBERS:**

Jeffrey Lamont Brown

Jennifer Chen

**COMPANY:**

Jeffrey Lamont Brown, Manager

Company notice information:

Tallgrass Pictures, LLC
Att: Jeffrey Lamont Brown, Manager
710 13th Street (#300)
San Diego, California 92101
Email: jb@izolabakery.com

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# **EXHIBIT A**

Units Issued (as of June 9, 2022)

| MEMBERS | # OF UNITS | OWNERSHIP PERCENTAGE |
| --- | --- | --- |
| Jeffrey Lamont Brown | 9,600,000 Units | 80% |
| Jennifer Chen | 2,400,000 Units | 20% |
| Total | 12,000,000 Units | 100% |

**Attachment 5:** `izola4_appxd.pdf`

# APPENDIX D:  
Articles of Organization

1

# INITIAL FILING:  
Articles of Organization

1

| State of California Kevin Shelley Secretary of State LIMITED LIABILITY COMPANY ARTICLES OF ORGANIZATION NOTE: A limited liability company is not permitted to render professional services. A $70.00 filing fee must accompany this form. |  | File # 200433710094 FILED in the office of the Secretary of State of the State of California NOV 15 2004 KEVIN SHELLEY, SECRETARY OF STATE This Space For Filing Use Only |
| --- | --- | --- |
| IMPORTANT - Read instructions before completing this form. |  |  |
| 1. NAME OF THE LIMITED LIABILITY COMPANY (END THE NAME WITH THE WORDS "LIMITED LIABILITY COMPANY," "LTD. LIABILITY CO.," OR THE ABBREVIATIONS "LLC" OR "L.L.C.") Tallgrass Pictures LLC |  |  |
| 2. THE PURPOSE OF THE LIMITED LIABILITY COMPANY IS TO ENGAGE IN ANY LAWFUL ACT OR ACTIVITY FOR WHICH A LIMITED LIABILITY COMPANY MAY BE ORGANIZED UNDER THE BEVERLY-KILLEA LIMITED LIABILITY COMPANY ACT. INITIAL AGENT FOR SERVICE OF PROCESS - If the agent is an individual, the agent must reside in California and both items 3 and 4 must be completed. If the agent is a corporation, the agent must have on file with the California Secretary of State a certificate pursuant to Corporations Code section 1505 and item 3 must be completed (leave item 4 blank). 3. NAME OF THE INITIAL AGENT FOR SERVICE OF PROCESS Jeffrey Lamont Brown 4. IF AN INDIVIDUAL, THE ADDRESS OF THE INITIAL AGENT FOR SERVICE OF PROCESS IN CALIFORNIA ADDRESS 1406 Torrance St CITY San Diego STATE CA ZIP CODE 92101 |  |  |
| 5. THE LIMITED LIABILITY COMPANY WILL BE MANAGED BY: (CHECK ONLY ONE) ☑ ONE MANAGER ☐ MORE THAN ONE MANAGER ☐ ALL LIMITED LIABILITY COMPANY MEMBER(S) |  |  |
| 6. ADDITIONAL INFORMATION SET FORTH ON THE ATTACHED PAGES, IF ANY, IS INCORPORATED HEREIN BY THIS REFERENCE AND MADE A PART OF THIS CERTIFICATE. |  |  |
| 7. TYPE OF BUSINESS OF THE LIMITED LIABILITY COMPANY (FOR INFORMATIONAL PURPOSES ONLY) Photography |  |  |
| 8. I DECLARE I AM THE PERSON WHO EXECUTED THIS INSTRUMENT, WHICH EXECUTION IS MY ACT AND DEED. Jeffrey Lamont Brown Manager/Organizer SIGNATURE OF ORGANIZER Jeffrey Lamont Brown Manager Tallgrass Pictures TYPE OR PRINT NAME OF ORGANIZER November 11, 2004 DATE |  |  |
| 9. RETURN TO: NAME Jeffrey Brown FIRM Tallgrass Pictures ADDRESS 423 7th Avenue CITY/STATE San Diego, CA ZIP CODE 92101 |  |  |
| LLC-1 (REV 08/2004) APPROVED BY SECRETARY OF STATE |  |  |

# STATEMENT OF INFORMATION:  
Updating Articles of Organization

1

![img-0.jpeg](img-0.jpeg)

![img-1.jpeg](img-1.jpeg)

BA20220801862

![img-2.jpeg](img-2.jpeg)

# STATE OF CALIFORNIA

Office of the Secretary of State

# STATEMENT OF INFORMATION

LIMITED LIABILITY COMPANY

California Secretary of State

1500 11th Street

Sacramento, California 95814

(916) 653-3516

For Office Use Only

-FILED-

File No.: BA20220801862

Date Filed: 9/5/2022

Entity Details

Limited Liability Company Name

Entity No.

Formed In

TALLGRASS PICTURES LLC

200433710094

CALIFORNIA

Street Address of Principal Office of LLC

Principal Address

3312 FRONT ST

SAN DIEGO, CA 92103

Mailing Address of LLC

Mailing Address

Attention

3312 FRONT ST

SAN DIEGO, CA 92103

Jeffrey Brown

Street Address of California Office of LLC

Street Address of California Office

3312 FRONT ST

SAN DIEGO, CA 92103

Manager(s) or Member(s)

| Manager or Member Name | Manager or Member Address |
| --- | --- |
| Jeffrey Lamont Brown | 710 13th St. #300 SAN DIEGO, CA 92101-7351 |
| Jennifer Chen | 3312 FRONT ST. SAN DIEGO, CA 92101 |
| Jeffrey Lamont Brown | 3312 FRONT ST. SAN DIEGO, CA 92101 |

Agent for Service of Process

Agent Name

Agent Address

JEFFREY L BROWN

3312 FRONT ST.

SAN DIEGO, CA 92103

Type of Business

Type of Business

IZOLA Bakery

Email Notifications

Opt-in Email Notifications

Yes, I opt-in to receive entity notifications via email.

Chief Executive Officer (CEO)

| CEO Name | CEO Address |
| --- | --- |
| None Entered |  |

Labor Judgment

No Manager or Member of this Limited Liability Company has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code.

B1076-4637 09/05/2022 5:26 PM Received by California Secretary of State

Page 1 of 2

Electronic Signature

☑ By signing, I affirm under penalty of perjury that the information herein is true and correct and that I am authorized by California law to sign.

Jeffrey Brown

09/05/2022

Signature

Date

B1076-4638 09/05/2022 5:26 PM Received by California Secretary of State

Page 2 of 2

**Attachment 6:** `izola4_subagmt.pdf`

# **TRANCHE 3 SUBSCRIPTION AGREEMENT**  
**TALLGRASS PICTURES LLC dba IZOLA Bakery**

Tallgrass Pictures LLC  
c/o Jeffrey Lamont Brown, Manager  
710 13$^{th}$ Street (#300)  
San Diego, CA 92101  
Email: jb@izolabakery.com

Dear Sir:

Reference is made to the offer and sale of membership units (each a '**Unit**') in Tallgrass Pictures LLC, a California limited liability company (the '**Company**'), to certain investors pursuant to a 'Regulation Crowdfunding' offering (the '**Offering**') as set forth in those certain offering materials (as supplemented or amended from time to time) (the '**Offering Materials**') available to the undersigned on the Company offering profile at https://www.mainvest.com.

The undersigned acknowledges that the Offering consists of the sale of Units at a price per Unit of $2.00 and that immediately preceding the Offering, there are 12,717,500 Units issued and outstanding. The undersigned further acknowledges that (a) the Company will not, except if waived in writing by the Company, accept subscriptions for less than $1,000 (corresponding to the purchase of 500 Units); (b) if the Company fails to receive offers to purchase Units exceeding the target offering amount identified in the Offering Statement (also known as a Form C) filed in connection with the Offering (as may be amended or supplemented by a Form C/A), the Company may reject this Subscription Agreement and cancel the Offering; (c) the Company will accept subscriptions for Units on a first come, first served basis, as and when such subscription agreements, along with the required consideration, are received; (d) the Company may accept only a portion of a subscription for Units in its discretion; (e) the Manager of the Company ('**Manager**') reserves the right, in Manager's sole discretion, (i) to accept or reject any subscription agreement or limit the amount of Units which any investor in the Offering may acquire; (ii) to accept investment in excess of the target offering amount up to a certain maximum investment amount, each as identified in the Offering Statement filed in connection with the Offering (as may be amended or supplemented); and (f) the ownership of Units shall be subject to the terms and conditions of the governing documents of the Company, including, without limitation, the Articles of Organization of the Company filed with the Secretary of State of California, as amended, and the Operating Agreement of Tallgrass Pictures LLC, a California limited liability company ('**Operating Agreement**'), copies of which are included in the Offering Materials.

Based on the above acknowledgements, and subject to the terms and conditions of this Subscription Agreement, the undersigned hereby agrees as follows:

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1. Subscription for Units. The undersigned hereby subscribes for and agrees to purchase [REDACTED] Units of the Company, for an aggregate investment amount of $[REDACTED], on the terms and conditions set forth in this Subscription Agreement. The undersigned understands that he, she or it may only cancel this subscription as specifically set forth in the Offering Materials and, subject to such cancellation rights, this subscription is irrevocable.

2. Closing of Purchase; Investor Deliveries. The closing (the 'Closing') of the purchase of the Units by the undersigned shall take place on such date that the Manager acknowledges its acceptance of this Subscription Agreement by signing it. Prior to execution of this Subscription Agreement by Manager, Manager must receive from the undersigned (a) this Subscription Agreement, duly completed and executed by the undersigned, and (b) payment of the full investment amount via Automatic Clearing House (ACH) Transfer or Debit Card to an escrow account that shall hold all funds from subscriptions to purchase Units designated by Mainvest, Inc. until such time as the Offering has completed. Upon receipt of valid subscriptions and payment for Units in excess of the target offering amount, Mainvest will instruct the Escrow Agent to transfer all capital raised, less fees owed to Mainvest, to the Company within five (5) business days of the funding, and the Company will deliver a signed counterpart of this Subscription Agreement within ten (10) days of the funding transfers. The undersigned recognizes that the Company shall have the right to reject this subscription, in whole or in part, for any reason whatsoever and return the subscription proceeds without interest.

3. Agreement to be Bound by Operating Agreement. As of the Closing, the undersigned shall be admitted to the Company as a Member (as that term is defined in the Operating Agreement) and shall have all the rights and be subject to all the obligations of such Member, as an owner of Units, under the Operating Agreement. The undersigned understands and agrees that his, her, or its ownership of Units will be governed by the Operating Agreement and undersigned shall be bound by all the terms and conditions of the Operating Agreement. The undersigned further acknowledges and agrees that, except as otherwise expressly provided in the Operating Agreement, arbitration is the sole and exclusive remedy for the settlement of any dispute or controversy concerning the Operating Agreement or the rights of the parties under the Operating Agreement.

# 4. Notice Address; Payment Acknowledgment.

a. The undersigned's contact information for purposes of notices and other communications provided under the Operating Agreement is set forth in this Subscription Agreement and the undersigned acknowledges that any changes to his, her or its contact information in Company's records must comply with the procedures set forth in the Operating Agreement.

b. The undersigned agrees to maintain an account with an online portal or other agent designated by the Company with current payment information necessary for payments to the undersigned under the terms of the Operating Agreement to be completed. All such payments to the undersigned shall be deposited into the undersigned's linked account, or through any other reasonable payment method as requested by the Company.

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5. Investor Representations and Warranties; Additional Covenants. In order to induce the Company to permit the undersigned to purchase all, or a designated number of the Units, the undersigned hereby warrants, represents and covenants to the Company:

a. The undersigned acknowledges that the Company has made available to him, her or it the opportunity to ask questions and receive answers concerning the Company, the Units, the Operating Agreement, the Offering Materials, this Subscription Agreement and any other information provided by the Company to the undersigned. The undersigned has consulted such legal, tax, and investment advisors, as he, she or it, in his, her or its sole discretion, has deemed necessary or appropriate in connection with this investment and the information made available to the undersigned by the Company.

b. The undersigned is purchasing the Units for his, her or its own account for investment only and not with a view to the distribution or resale thereof to anyone else. The undersigned fully understands that an investment in the Units involves a high degree of risk. The undersigned is familiar with the nature of, and the risks attendant to, an investment of the type described in the Offering Materials and this Subscription Agreement, the tax consequences of such an investment, and is financially capable of bearing the economic risk of investing in the Company and can afford the loss of the total amount of such investment.

c. The undersigned has received, carefully read and understands the Offering Materials, including, without limitation, the Company's Operating Agreement. The undersigned has had a full opportunity to review the information in the Offering Materials and the provisions of the Operating Agreement and to consult with his, her or its independent legal, financial, accounting, tax and other professional advisors regarding the information set forth therein with respect to his, her or its investment in the Units. The undersigned understands that the Offering Statement filed with Securities and Exchange Commission in connection with the Offering may be amended or updated from time to time by the Company and if the amendment reflects material changes, additions or updates, the undersigned will be required to affirmatively reconfirm its subscription for Units hereunder within five business days of the filing of the amendment, or the investor's commitment will be considered cancelled.

d. The undersigned understands that the Units being offered are not subject to an effective registration statement under the Securities Act of 1933, amended (the '**Securities Act**') and applicable state securities laws, and that the Units are being offered and sole in reliance on exemptions provided under Title III of the Jobs Act and Regulation Crowdfunding, described in 17 CFR §§ 227.100-502 (the '**CF Exemption**'). The undersigned further understands that (i) no governmental authority has made any finding or determination relating to the fairness or the merits of the Offering and (ii) the undersigned has no right to require the Company to register the Units under federal or state securities laws at any time.

e. The undersigned agrees that the undersigned will not, directly or indirectly, offer, sell, pledge, transfer, or otherwise dispose of (or solicit any offers to buy, purchase, or otherwise acquire or take a pledge of) the Units except in compliance with the Company's Operating Agreement and the CF Exemption. The undersigned acknowledges that the transferability of the Units is severely limited and that the undersigned must continue to bear

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the economic risk of this investment for an indefinite period unless the sale or transfer thereof is subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is available, and that during the period in which the Units are being offered and sold by the Company, and for a period of twelve months from the date of the last sale by the Company of the Units in the Offering, all permitted resales of all or any part of the Units, by any person, shall be made only in accordance with the CF Exemption.

f. The undersigned: (i) does not have an overall commitment to investments that are not readily marketable that is disproportionate to his, her or its net worth, and his, her or its acquisition of the Units will not cause such overall commitment to become excessive, and (ii) has adequate net worth and means of providing for his, her or its current needs and personal contingencies to sustain a complete loss of his, her or its investment in the Units, and has no need for liquidity in the investment in the Units. The undersigned's investment in the Units, together with any other investments made in any Regulation Crowdfunding offering during the 12-month period preceding the date of such transaction, does not exceed the maximum amount allowed by governing regulations and described by 17 CFR §227.100(a)(2).

g. The undersigned's principal residence (or principal office in the case of a corporation, limited liability company, partnership or trust) both at the time of the initial offer of the Units to the undersigned and at present was and is within [REDACTED].

h. Subject to the Company's rights to reject all or a portion of the undersigned's offer to invest, the undersigned understands that he, she or it shall, by entering into this Subscription Agreement, become a party to the Operating Agreement of the Company, which provides for, among other things, the terms and conditions applicable to the ownership of the Units.

i. Other than the fees to be paid to Mainvest by the Company (as discussed in the Offering Materials), no commission or other remuneration shall be paid to any person in connection with the offer or sale of the Units.

j. The undersigned acknowledges that any legal counsel for the Company is legal counsel solely for the Company regarding this investment and not for the undersigned and that the undersigned therefore may want to have his, her, or its own legal counsel review the Operating Agreement (and related Offering Materials) before signing.

k. The undersigned acknowledges that an investment in the Units is speculative and agrees that no guarantees have been made to the undersigned by the Company or any of their respective agents, managers, members, employees or affiliates, about an investment in the Units or the future financial performance of the Company. It is understood that information and explanations related to the terms and conditions of the purchase and ownership of the Units provided in the Offering Materials or otherwise by the Company shall not be considered investment advice or a recommendation to purchase the Units, and that neither the Company, nor any of their respective affiliates is acting or has acted as an advisor to the undersigned in deciding to invest in the Units. The undersigned has reviewed the cautionary statements made in the Offering Materials about the Company's projected future financial information and other

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forward-looking statements, and has not relied upon such projections or forward-looking information as if such projections and statements were guaranteed

6. **Additional Investment Considerations.** In considering an investment in the Company, the undersigned has been made aware of certain special considerations and risk factors, some of which are set forth in **Exhibit 1** hereto. However, the inclusion of specific special considerations and risk factors in this Subscription Agreement should not be construed to imply that each area of potential risk has been described in complete detail, or that there are no other special considerations or risk factors that apply to an investment in the Company. The undersigned is encouraged to review **Exhibit 1** carefully.

# 7. **Specific Waivers and Approvals.**

a. **Waiver and Approval of Certain Affiliate Transactions** The Operating Agreement permits the Company to enter into contracts, agreements, and business dealings with Members and Affiliates (as defined in the Operation Agreement) (“**Affiliate Transactions**”) which contain provisions and conditions which in the aggregate are substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members or Manager. Prior to the Offering, the Company entered into a number of Affiliate Transactions which are generally described in **Exhibit 2** hereto (“**Disclosed Affiliate Transactions**”). By entering into this Subscription Agreement, the undersigned acknowledges the Disclosed Affiliate Transactions and confirms that the Company has made available to him, her or it the opportunity to ask questions and receive answers concerning the Disclosed Affiliate Transactions and to investigate and examine the Disclosed Affiliate Transactions and any underlying documents to his, her or its satisfaction (and has consulted such legal, tax, and investment advisors, as he, she or it, in his, her or its sole discretion, has deemed necessary or appropriate to understand the Disclosed Affiliate Transactions, the conflicts of interest arising therefrom, and the risks relating making an investment in the Company in light of the Disclosed Affiliate Transactions). Further, if the undersigned becomes a Member of the Company, by entering into this Subscription Agreement, with respect to the Affiliate Transactions described in **Exhibit 2**, the undersigned (a) consents to the Disclosed Affiliate Transactions, (b) waives the conflicts of interest arising from the Disclosed Affiliate Transactions, (c) waives any right to object to the Disclosed Affiliate Transactions or to assert that the provisions and conditions of the Disclosed Affiliate Transactions are less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members in violation of the Operating, and (d) acknowledges and agrees that it shall not be a violation of the Operating Agreement for the Manager to engage in any activities Manager in good faith determines are necessary, appropriate, desirable, ancillary, convenient or incidental to reasonably carry out duties incidental to the Disclosed Affiliate Transactions.

b. **Change to Operating Agreement Regarding Approval of Affiliate Transactions.** If the undersigned becomes a Member of the Company, by entering into this Subscription Agreement, the undersigned acknowledges and agrees that, notwithstanding anything to the contrary in the Operating Agreement, the Company may enter into Affiliate Transactions in the future which contain provisions and conditions that the Manager believes in

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good faith are, in the aggregate, substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members or Manager. To the extent the foregoing is contrary to any provision of the Operating Agreement, this Subscription Agreement shall, with respect to the undesigned, supersede the Operating Agreement and the Operating Agreement shall be deemed so amended with respect to the undersigned.

c. Specific Approval of Future Issuance of Units. The undersigned acknowledges and agrees that pursuant to the Operating Agreement, the Manager is authorized to cause the Company from time to time to issue to any person or persons additional Units of the Company in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, all as shall be determined by the Manager, including (a) the allocations of items of Company income, gain, loss, deduction and credit to each such class or series of Units, (b) the right of each such class or series of Units to share in Company distributions, (c) the rights of each such class or series of Units upon dissolution and liquidation of the Company, (d) the price at and the terms and conditions on which such class or series of Units may be redeemed by the Company, if such Units are redeemable by the Company, (e) the rate at and the terms and conditions on which such class or series of Units may be converted into any other class or series of Units, if any class or series of Units are issued with the privilege of conversion, and (f) the right of such class or series of Units to vote on matters relating to the relative rights and preferences of such class or other matters. The undersigned further acknowledges and agrees that upon the issuance of any class or series of Units, the Manager may amend any provision of the Operating Agreement and may add any new provision to the Operating Agreement, and execute, swear to, acknowledge, deliver, file and record amended Articles of Organization and whatever other documents may be required in connection therewith, as shall be necessary or desirable to reflect the issuance of such class or series of Units and the relative rights and preferences of such class or series of Units as to the matters set forth in the preceding sentence. By entering into this Subscription Agreement, the undersigned approves such future issuances and all things the Manager may in good faith deem to be necessary or advisable in connection with any such future issuance to reflect the issuance of the Units and the admission of future Members acquiring the Units.

**The undersigned confirms he/she/it has reviewed, understands and agrees to the waivers and approvals set forth in Section 7a, 7b and 7c above.**

**Initials:** [BBOX]0.5400,0.7000,0.6500,0.7200[/BBOX]

8. General. This Subscription Agreement (a) shall be binding upon undersigned and the legal representatives, successors and assigns of the undersigned, (b) shall survive the admission of Investor as a Member of the Company (as defined in the Operating Agreement), (c) shall not be assignable by the undersigned without the consent of the Manager, and (d) may not be amended except with the written consent of the undersigned and Manager. This Subscription Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. The parties may execute this Subscription Agreement by means of electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000 e.g.,

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www.docusign.com) and the parties agree that the receipt of this Subscription Agreement so executed shall be binding on such parties and shall be construed as originals. This Subscription Agreement shall be governed by the laws of the State of California, without regard to principles of conflicts of laws. Any term or provision of this Subscription Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms or provisions of this Subscription Agreement or affecting the validity or enforceability of any of the terms or provisions of this Subscription Agreement in any other jurisdiction. It is understood and agreed that this Subscription Agreement constitutes the full, complete and final expression of the parties' understanding with respect to the subject matter hereof.

9. Indemnity. The undersigned agrees to indemnify and hold harmless the Company and its managers, members, employees, agents, representatives and affiliates, and any person acting on behalf of the Company, from and against any and all damage, loss, liability, cost and expense (including reasonable attorneys' fees) which any of them may incur by reason of the failure by the undersigned to fulfill any of the terms and conditions of this Subscription Agreement, or by reason of any misrepresentation or breach of warranty made by the undersigned herein or in any other document provided by the undersigned to the Company or its representatives. All representations, warranties and agreements contained herein shall survive the execution, delivery and acceptance of this Subscription Agreement and the undersigned's purchase of the Units.

[Signatures Begin on Following Page]

Page 7 of 22

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement as of the signature date below.

**SUBSCRIBER:**

Signature (and Title, if applicable)

Date:

Print Name (and Title, if applicable)

Tax ID:

Street Address:

Phone Number:

City, State, Zip:
Email:

**AGREED TO AND ACCEPTED BY COMPANY:**

**Tallgrass Pictures LLC,**
a California limited liability company

By:
Jeffrey Lamont Brown, Manager

Page 8 of 22

# EXHIBIT 1

## CERTAIN RISK FACTORS

In addition to the risk disclosures set forth in the Subscription Agreement and in the offering materials, as supplemented from time to time ('**Offering Materials**'), available to the undersigned on the Tallgrass Pictures LLC ('**Company**') offering profile at https://www.mainvest.com, each purchaser of Units in the Company (referred to herein as '**Investor**' or '**you**,' or collectively as '**Investors**') is urged to carefully consider the risk factors discussed below and to consult its own advisors with respect to the offering of Units by Company (the '**Offering**') prior to making an investment.

The rights and obligations of the Members of the Company are set forth in the Operating Agreement of Tallgrass Pictures LLC ('**Operating Agreement**'). A copy of the Operating Agreement is included as Appendix C of the Offering Materials. Investors are encouraged to review the Operating Agreement and the other Offering Materials before making an investment. Any capitalized terms not defined herein shall have the meanings set forth in the Operating Agreement.

In addition to their own investigation and examination of the Company, the Manager, the Offering Materials, the market and other risks, Investors in the Company should consider, among other things, the following (with the understanding that the inclusion of specific special considerations and risk factors in this Subscription Agreement should not be construed to imply that each area of potential risk has been described in complete detail, or that there are no other special considerations or risk factors that apply to an investment in the Company).

The Company's current business of owning and operating IZOLA artisanal bakeries and the marketing, licensing and sale of products and services using the IZOLA's trade name will be referred to below as 'IZOLA.'

## THE UNITS ARE A SPECULATIVE INVESTMENT; YOU MIGHT LOSE YOUR MONEY

The Company's current business, the development and operation of IZOLA artisanal bakeries, is in the early stages of its development on which to base an evaluation of its business and prospects. Investors in the Company should understand that the market for IZOLA's products and services has not been tested beyond IZOLA's initial retail location and many variables, both anticipated and unanticipated, may affect the success of IZOLA. No assurance can be given as to the ultimate success of IZOLA, as to its ability to generate revenues or as to how soon, if ever, the purchasers of Units may receive a return on their investment.

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# RISKS OF UNDERCAPITALIZATION AND ADDITIONAL CAPITAL RAISES

IZOLA currently has a limited sales history. Without robust sales, IZOLA will rely almost entirely on the proceeds from the Offering to fund growth of its operations. The Company anticipates that it will seek to raise additional capital from time to time. A financing may involve incurring debt or selling equity securities to raise money to pay for operating expenses, to implement IZOLA's business strategy or to otherwise maximize the opportunities available to IZOLA. The Company cannot assure Investors that additional financing will be available to IZOLA on commercially reasonable terms, or at all. If the Company raises capital through the sale of equity securities, the percentage ownership of the Members could be diluted. In addition, any new equity securities may have rights, preferences or privileges senior to those of the holders of the Company's outstanding Units at the time of such investment. If the Company is unable to obtain additional financing, its ability to fund its operations and execute its business plan could be materially adversely affected and Investors could lose all or a significant portion of their investment. The Company's inability to adequately fund its business development would also harm its ability to earn revenues.

# LIMITED SERVICES

IZOLA operates with a very limited scope, offering only particular goods and services to customers, making them vulnerable to changes in customer preferences.

# LACK OF ACCOUNTING CONTROLS

Larger companies typically have in place strict accounting controls. Smaller companies typically lack these controls, exposing themselves to additional risk.

# COMPETITION

The market in which the Company operates is highly competitive and could become increasingly competitive with new entrants in the market. IZOLA competes with many other businesses, both large and small, on the basis of products offered, quality, price, location, and customer experience. Changes in customer preference away from IZOLA's core business or the inability to compete successfully against other competitors could negatively affect the Company's financial performance.

# RELIANCE ON MANAGEMENT

As a securities holder, you will not be able to participate in the Company's management or vote on and/or influence any managerial decisions regarding the Company, including decisions relating to IZOLA. Furthermore, if the founders or other key personnel of the Company were to leave the Company or become unable to work, the Company (and your investment) could suffer substantially.

The Company's success will be dependent, in part, upon the services of its senior management, currently Jeffrey Lamont Brown ('Brown') and Jennifer Chen ('Chen'). The Company does not currently have written employment agreements with its senior management. The loss of the

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services of one or more members of senior management could have a significant adverse effect on the Company's business, operating results and financial condition.

## FINANCIAL FORECASTS RISKS

The financial forecasts provided to Investors by the Company are forecasts by the Company based upon assumption of stable economic conditions and other various assumptions regarding operations. The validity and accuracy of these assumptions will depend in large part on future events over which the Company and the key persons will have no control. Changes in assumptions or their underlying facts could significantly affect the forecasts. To the extent that the assumed events do not occur, the outcome may vary significantly from the projected outcomes. Consequently, there can be no assurance that the actual operating results will correspond to the forecasts provided herein. Additionally, IZOLA is a newly established business and therefore has limited operating history from which forecasts could be projected.

IZOLA's limited operating history makes financial forecasting highly speculative. Because of the speculative nature of such forecasting, future operating results will undoubtedly differ materially from any forward-looking or 'pro forma' forecasts and financial projections which may have been provided to Investors by the Company. Investors are therefore cautioned against relying on any such forward-looking statements or financial projections as a prediction of future results.

## INABILITY TO SELL YOUR INVESTMENT

The law prohibits you from selling your securities (except in certain very limited circumstances) for 12 months after you acquire them. Even after that one-year period, a host of Federal and State securities laws may limit or restrict your ability to sell your securities. Even if you are permitted to sell, you will likely have difficulty finding a buyer because there will be no established market. In addition, the Operating Agreement restricts the transfer of Units. Given these factors, you should be prepared to hold your investment for its full term.

IZOLA anticipates that for the foreseeable future it will retain and reinvest any profits from operations back into the business to fund growth and expansion. Therefore, even if the Company is profitable, it is not likely to make any cash distributions to Investors for some time.

Each Investor will be required to represent that (i) the Units are being acquired for investment and not with a view to distribution or resale, (ii) such Investor understands the Units are not freely transferable and (iii) such Investor must bear the economic risk of the investment for an indefinite period of time because the Units: (a) have not been registered under the Securities Act or applicable state 'Blue Sky' or securities laws; and (b) cannot be sold unless they are subsequently registered or an exemption from such registration is available and such subscriber complies with the other applicable provisions of the Operating Agreement. There will be no market for the Units and Investors cannot expect to be able to liquidate their investment in case of an emergency. Further, the sale of the Units may have adverse federal income tax consequences (the potential purchasers are strongly advised to seek counsel from his or her tax and financial advisor with respect to an investment in the Company). A Member of the

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Company will be permitted to assign or sell its interest in the Company only in very limited circumstances, as more fully set forth in the Operating Agreement.

## THE COMPANY MIGHT NEED MORE CAPITAL

The Company might need to raise more capital in the future to fund/expand operations, buy property and equipment, hire new team members, market its services, pay overhead and general administrative expenses, or a variety of other reasons. There is no assurance that additional capital will be available when needed, or that it will be available on terms that are not adverse to your interests as an investor. If the Company is unable to obtain additional funding when needed, it could be forced to delay its business plan or even cease operations altogether.

## THE PRICE OF THE UNITS WAS DETERMINED ARBITRARILY

The purchase price of the Units have been determined primarily by the anticipated capital needs of the Company and bears no relationship to any established criteria of value such as book value or earnings per Unit, or any combination thereof. There has been no independent or professional valuation of the Company for the Offering.

In 2022, Brown gifted 20% of his Units (2,400,000 Units) to Chen based on a value of $.01 per Unit.

The initial round (Tranche 1) of the Offering closed on July 2, 2022. The price for the Units during the initial round was $1.00 per Unit. The Offering was extended (Tranche 2) to January 31st, 2023 and the price for the Units was increased to $2.00 per Unit, which is twice the sale price of the Units in the initial round of this Offering.

## THE INTENDED USE OF PROCEEDS IS ANTICIPATORY AND MAY BE SUBJECT TO CHANGE

The net proceeds to the Company from the sale of the Units are anticipated to be used as set forth in those certain offering materials (as supplemented or amended from time to time) (the 'Offering Materials') available to the undersigned on the Company offering profile at https://www.mainvest.com. The Investor understands the use of funds described in the Offering Materials are anticipated uses only and that the Manager retains broad discretion to reallocate the proceeds of the Offering as the Manager deems necessary or appropriate to suit the needs of the Company as circumstances evolve. The failure of the Manager to apply such funds effectively could have a material adverse effect on the Company's business, results of operations and financial condition. The Company currently anticipates that it will retain future earnings, if any, for use in the operation and expansion of the Company's business (and the payment of certain debt) and, therefore, the Company does not anticipate declaring any distributions to Members in the foreseeable future.

## CHANGES IN ECONOMIC CONDITIONS COULD HURT THE COMPANY

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Factors like global or national economic recessions, changes in interest rates, changes in credit markets, changes in capital market conditions, declining employment, changes in real estate values, changes in tax policy, changes in political conditions, and wars and other crises, among other factors are unpredictable and could negatively affect the Company's financial performance or ability to continue to operate. In the event the Company ceases operations due to the foregoing factors, it cannot guarantee that it will be able to resume operations or generate revenue in the future.

## NO REGISTRATION UNDER SECURITIES LAWS

The Offering of the Units will not be registered with the Securities and Exchange Commission under the Securities Act or the securities agency of any state, and the Units are being offered in reliance upon an exemption from the registration provisions of the Securities Act and state securities laws ('**Regulation Crowdfunding Exemption**'). Since this is a nonpublic offering and, as such, is not registered under federal or state securities laws, Investors will not have the benefit of review by the Securities and Exchange Commission or any state securities regulatory authority. If the Company should fail to comply with the requirements of the Regulation Crowdfunding Exemption, Investors may have the right, if they so desired, to rescind their purchase of the Units. It is possible that one or more Investors seeking rescission would succeed. If a number of Members were successful in seeking rescission, the Company would face severe financial demands that would adversely affect the Company as a whole and, thus, the investments in the Company by the remaining Members.

## INCOMPLETE OFFERING INFORMATION

Title III of the JOBS Act does not require the Company to provide investors with all the information that would be required in some other kinds of securities offerings, such as a public offering of shares (for example, publicly traded firms must generally provide investors with quarterly and annual financial statements that have been audited by an independent accounting firm). Although Title III does require extensive information, it is possible that Investors in the Company would make a different decision if they had more information.

## LACK OF ONGOING INFORMATION

The Company will be required to provide some information to Investors for at least 12 months following the Offering. However, this information is far more limited than the information that would be required of a publicly-reporting company; and the Company is allowed to stop providing annual information in certain circumstances.

## UNINSURED LOSSES

Although the Company will carry some insurance, the Company may not carry enough insurance to protect against all risks to the business. Additionally, there are some kinds of risks that are

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very difficult or impossible to insure against, at least at a reasonable cost. Therefore, the Company could incur an uninsured loss that could damage its business.

## CHANGES IN LAWS

Changes in laws or regulations, including but not limited to zoning laws, environmental laws, tax laws, consumer protection laws, securities laws, antitrust laws, and health care laws, could negatively affect the Company's financial performance or ability to continue to operate. Specifically, any additional regulation on the industry could significantly negatively affect the Company's business.

## CERTAIN FINANCING RISKS REGARDING EXPANSION TO SECOND LOCATION

IZOLA plans to open a second location at 3320 & 3326 Fairmount Avenue, San Diego, CA 92105 (the '**New Location Property**'). 3320 Fairmount LLC ('**Property Owner**'), which is co-owned by Brown and Chen, has acquired the New Location Property. Property Owner and the Company have entered into a lease agreement pursuant to which the Company shall lease the New Location Property for approximately 25 years ('**New Location Lease**'). Property Owner entered into certain loans allowing Property Owner to borrow up to an aggregate principal amount of $2,005,000 to finance the acquisition of the New Location Property and the construction of certain improvements to the New Location Property ('**New Location Financing**'). The Company, Brown, and Chen are each joint and several guarantors of the New Location Financing. If the Company does not generate sufficient revenues to pay the rent under the New Location Lease and the Company is unable to raise additional financing (whether debt or equity) to make the rental payments, then such failure to pay rent may result in a default under the New Location Lease resulting in the loss of the Company's leasehold interest in the New Location Property, as well as liability to the Property Owner for damages under the terms of the New Location Lease. In addition, failure to pay the rent under the New Location Lease may result in the Property Owner not having the resources to pay the loan payments under the New Location Financing which may result in, among other things, a default under the New Location Financing, the foreclosure by the lender of the New Location Property, the termination of the New Location Lease and the Company's leasehold interest in the New Location Property, and a collection proceeding for the unpaid balance of the New Location Financing plus damages against the Company under its joint and several guaranty of the New Location Financing. Any of the foregoing may result in the possible loss by Investors of all or a significant portion of their investment.

## AFFECTS OF NON-COMPLIANCE WITH CURRENT DEH PERMIT

Currently, IZOLA is licensed to sell food to consumers from its current location at 710 13th Street (Ste 300) San Diego, CA, under a Class B Cottage Food Permit issued by the Department of Environmental Health and Quality Food and Housing Division (the '**DEH**'). The Class B Cottage Food Permit requires that a permittee have no more than one full-time equivalent employee (other than owners and their immediate family and household members) and no more than $50,000 in annual revenue. IZOLA currently exceeds those limitations (IZOLA currently has 30 full-time employees and generates approximately $145,000, in monthly revenue). IZOLA understands that to receive a new permit to accommodate its current business operations, it will

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have to renovate its kitchen at the current location, which will include, among other things, new flooring, new wall covering, additional plumbing, and a dedicated dishwashing area. IZOLA has submitted renovation plans to the DEH and is awaiting approval. Once approved, IZOLA intends to get bids and suspend operations at the bakery during construction and until the new permit is issued. Since many aspects of the construction and permitting process are outside of IZOLA's control, IZOLA cannot guarantee that the new permit will be issued within a specific amount of time. The new permit does not have revenue or employee headcount limitations.

The DEH could demand immediate compliance with the Class B Cottage Food Permit until the new permit is issued. If that comes to pass, IZOLA may have to reduce the scope of its operations until it is in compliance with the Class B Cottage Food Permit or suspend operations until the renovations are complete and the new permit is issued, which may adversely impact its revenue projections. It is also possible that the renovations and/or securing the new permit may take longer than anticipated, which will also adversely affect its revenue projections. Further, the DEH has the authority to fine IZOLA up to 3x the cost of the new permit or $2,790 total. Management believes that any short-term suspension or reduction in its operations due to the expected time to renovate and receive the new permit, or any monetary penalty related to its non-compliance with the Class B Cottage Food Permit, will not have a material long-term impact on IZOLA's operations. However, this may not be the case if IZOLA is forced to close the bakery or materially reduce its operations for an extended period of time.

## CONFLICTS OF INTEREST WITH COMPANIES AND THEIR MANAGEMENT

The Operating Agreement permits the Company to enter into contracts, agreements, and other business dealings with Members and Affiliates (as defined in the Operation Agreement) ('**Affiliate Transactions**') which contain provisions and conditions which in the aggregate are substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members or Manager ('**Affiliate Transaction Requirements**').

The Company has entered into certain material Affiliate Transactions which are set forth in **Exhibit 2** of Subscription Agreement. These Affiliate Transactions constitute a conflict of interest between Brown, Chen, and Property Owner (which is owned by Brown and Chen), on the one hand, and the Company, on the other hand. While the Company believes that the provisions and conditions of the Affiliate Transactions meet the Affiliate Transaction Requirements considering all of the relevant circumstances, including those relating to the acquisition and financing of the New Location Property, the development of the New Location Property, the leasing market, and the requirements of the Company to successfully pursue its business plan, the terms of the Affiliate Transactions may not be deemed to meet the Affiliate Transaction Requirements if challenged by one or more Members of the Company.

Brown has personally guaranteed an SBA loan made to the Company; the Company, Brown and Chen have jointly and severally personally guaranteed the New Location Financing; and Brown and Chen may elect to guaranty future loans to the Company (as applicable). As Manager, Brown will have the discretion as to how to allocate the resources of the Company, including whether to

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pay down debt personally guaranteed by Brown and/or Chen. Brown may cause the Company to pay down this debt instead of using the funds for other business purposes, including business purposes that an Investor may believe is a better use of such funds, such as distributions to Members or investment in sales, marketing or new equipment.

Since the Company and Property Owner are jointly and severally liable under the New Location Financing, Brown's decisions on behalf of the Company may be compromised by his and Chen's financial interest in Property Owner (Brown and Chen currently each have a 50% ownership interest in Property Owner).

The agreements governing the Affiliate Transactions may not address or may leave some discretion to the Company and the Property Owner as to how to address certain issues that may arise from time to time with respect to, among other things, the financing and development of the New Location Property and the operation of IZOLA at the New Location Property. Where such discretion exists, Brown and Chen, as the managing members of Property Owner, may generally make decisions that benefit the New Location Property to the detriment or expense of the Company with respect to the Affiliate Transactions.

Generally, an Investor's interests and the interests of the Company's management should coincide: However, an Investor's interests might be in conflict not only in the areas described above, but in other important areas, including these: An Investor might want the Company to act conservatively to maximize the chances or size of distributions to the Investors, while the Company might prefer to spend aggressively to grow the IZOLA business. An Investor may desire to keep the compensation of managers lower than what the managers believe is fair compensation for their services.

An Investor should thoroughly consider the actual and potential conflicts of interest that exist, and the risks relating thereto, before making an investment in the Company.

## FUTURE INVESTORS MIGHT HAVE SUPERIOR RIGHTS

The Manager has the power, without the vote of the Members, to create classes of membership interests or units having rights, powers, and duties superior to the Units to be purchased by Investors, including, without limitation, the right to be paid before holders of such Units, the right to receive larger distributions than the holders of such Units, or the right to have a greater voice in management than holders of such Units. Such superior rights may, among other things, have a materially adverse effect on the value of the Units purchased an Investor.

Any company whose securities are listed on a national stock exchange (for example, the New York Stock Exchange) is subject to a number of rules about corporate governance that are intended to protect investors. For example, the major U.S. stock exchanges require listed companies to have an audit committee made up entirely of independent members of the board of directors (i.e., directors with no material outside relationships with the Company or management), which is responsible for monitoring the Company's compliance with the law. The Company will not be required to implement these and other investor protections.

## THE COMPANY IS SUBJECT TO THE CONTROL OF THE MANAGER AND THE OWNER OF A MAJORITY OF THE UNITS

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The Company is a 'manager-managed limited liability company' as defined in the California Revised Uniform Limited Liability Company Act, currently codified in the California Corporations Code, Sections 17701.01-17713.13, as the same may be amended from time to time. Manager will have the right to make all day-to-day decisions and most major decisions with respect to the management and operation of the business and affairs of the Company. The Members will have only very limited rights of approval of Company matters as set forth in the Operating Agreement. When Member approval is required under the Operating Agreement a majority of the outstanding Units can generally approve such decisions. As of the date hereof, Brown is the Manager and is also the holder a majority of the Units. As a result, Brown has very broad authority to act on behalf of the Company and minority Members in the Company will have very limited rights to limit or curtail Brown's actions. In addition, while Brown is the Manager of the Company, he may not be removed as the Manager under any circumstances unless a majority of the Units entitled to vote (excluding any Units owned by Brown) establishes, pursuant to a formal judgment by a court of law, that Brown has committed fraud pertaining to the performance of his duties as Manager.

## THE BUSINESS PURPOSE OF THE COMPANY INCLUDES PURPOSES THAT MAY NOT BE OPERATING FOR PROFIT

While the principal business activity and purpose of the Company is the ownership and operation of IZOLA's bread cafes and the marketing, licensing and sale of products and services using the IZOLA's trade name, or any successor trade name, an additional business and purpose of the Company, which may not be operated for profit purposes, is the promotion of social and environmental change by supporting positive business practices, as determined by the Manager, including reducing inequality, lowering poverty levels, creating more sustainability for our environment, and building stronger communities. Accordingly, an investment in the Company may not be suitable for an investor who only wants to invest in a business that has a pure profit motive or who does not share the objectives of the Manager regarding supporting social and environmental change in this manner.

## MEMBERS INCLUDING THE MANAGER MAY ENGAGE IN OUTSIDE BUSINESS ACTIVITIES

The Manager will not be required to devote any fixed amount of time to the affairs of the Company. The Members, including the Manager, are permitted to continue to engage in other business activities and are not obligated to present to the Company or Investors any particular investment or opportunity, even if the opportunity is of a character which, if presented to the Company, could be taken by the Company. As a result, the Manager or Members could divert opportunities away from the Company and reduce the potential returns resulting from the investment.

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# THE UNITS ARE UNCERTIFICATED

Except as otherwise determined by the Manager, in Manager's discretion, the Units shall be uncertificated and a listing of the registered holders on the books and records of the Company shall be maintained solely on the registrar of the Company's membership interests and, if applicable, in the book-entry account system of any transfer agent appointed by the Company.

# DISPUTES RELATING TO THE UNITS AND OPERATING AGREEMENT TO BE ARBITRATED

In most circumstances, binding arbitration shall constitute the sole and exclusive remedy for the settlement of any dispute or controversy concerning the Operating Agreement and the rights of Investor under the Operating Agreement. The arbitration proceeding will be conducted in San Diego, California, before a single arbitrator, and administered by JAMS under the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time a demand for arbitration is made. The arbitration process is set forth in further detail in the Operating Agreement.

# THE COMPANY'S OBLIGATION TO INDEMNIFY THE MANAGER AND MANAGER'S AFFILIATES COULD RESULT IN SIGNIFICANT CHANGES THAT WOULD ADVERSELY AFFECT THE COMPANY'S PERFORMANCE

Under the Operating Agreement, the Manager and Manager's affiliates are not liable to the Company or to the Members for any act or omission except for acts of misconduct or gross negligence, and under certain circumstances, the Manager and Manager's affiliates will be entitled to indemnification from the Company for certain losses, including, without limitation, on personal guarantees of Company debt. Such indemnification obligations may be material. The indemnification obligations of the Company would be payable from the assets of the Company, including the capital contributions of the Members.

# RIGHTS TO REQUIRE MEMBERS TO PARTICIPATE IN A SALE TRANSACTION

Subject to certain limitations as set forth in the Operating Agreement, if Members holding a majority of the outstanding Units elect to consummate a sale of all of the Units or equity interests in the Company to any independent third party, the Operating Agreement obligates the other Members to consent to the proposed transaction and to take all other actions reasonably necessary or desirable to cause the consummation of such proposed transaction. Therefore, you may be required to sell your Units without consent if the owners of a majority of the Company's Units desire to sell their Units

# COMPANY HAS RIGHTS TO PURCHASE UNITS UNDER CERTAIN CIRCUMSTANCES

If a Member receives a bona fide written offer from a third party to purchase all or a portion of such Member's Units, the Company has a right of first refusal to purchase such Units as set forth in more detail in the Operating Agreement.

The Company shall have the right, as set forth in more detail in the Operating Agreement, to repurchase the Units of a Member upon the withdrawal, resignation, expulsion, bankruptcy,

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dissolution, death or occurrence of any other event which terminates the continued membership of such Member. The purchase price for such Member's Units shall be the fair-market value of such Units as determined by the Manager in Manager's good faith discretion (which means that the Manager may not be required to obtain an independent appraisal or valuation of the Units). The purchase price may be paid in full in cash or in installments as set forth in the Operating Agreement. These purchase terms are favorable to the Company.

## SIDE AGREEMENT BETWEEN BROWN AND CHEN

Brown and Chen have entered into an agreement ('**Side Agreement**') giving each other the option and right to purchase the other's Units ('**Purchase Right**') in the event of the termination of the other's membership with the Company, including the withdrawal, expulsion, bankruptcy, dissolution, or death of such person ('**Dissociation Event**'). The purchase price for such Units is their fair market value based on an appraisal process (if Brown or Chen, or their legal representatives, as applicable, cannot agree on a purchase price). The Operating Agreement generally gives the Manager the right to cause the Company (or an assignee), in Manager's discretion, to acquire a Member's Units with respect to a Dissociation Event at fair market value as determined in the Manager's good faith discretion. If either Brown or Chen suffered a Dissociation Event and the other exercised the Purchase Right with respect to such event, the Side Agreement would result in either Brown or Chen acquiring ownership of the other's Units, and not the Company, and possibly using a different process to determine the fair market value of the Units. If Chen acquires Brown's Units under the Side Agreement, then Chen may acquire enough Units to give her a majority of the outstanding Units, and, in such event, Chen will have sufficient votes to appoint herself the Manager of the Company, giving her substantial control over the Company's operations.

In addition to their business relationship operating IZOLA, Brown and Chen have a personal relationship. If their personal relationship ends (a '**Separation**'), then Brown has the right and option to purchase Chen's Units at fair market value, as agreed by Brown and Chen or, if they cannot agree, determined by an appraisal process. The Operating Agreement generally restricts transfers of Units except in certain circumstances, including transfers of Units approved by the Manager in its sole and absolute discretion. If Brown is the Manager at the time of Separation, then Brown will have the authority to approve the transfer of Units from Chen to Brown under the Side Agreement.

## MEMBERS CLAIMS ARE SUBORDINATE TO CREDITORS

In the event of a dissolution or termination of the Company, the proceeds realized from the liquidation of assets, if any, will be distributed to the Members only after the satisfaction of claims of creditors and the establishment of reserves. Accordingly, the ability of the Members to recover all or any portion of their investment under such circumstances will depend on the amount of the funds so realized and the claims to be satisfied therefrom.

## OTHER BUSINESS RISKS

The current business of the Company is the operation of an artisan bakery, limited to hot-from-the-oven small-batch croissants and wild sourdough. A business primarily focused on

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this concept is a relatively untried concept in the United States. The success of the Company's business will in large part be dependent upon the acceptance by the public of this concept. Failure of the concept to find acceptance among local customers would likely result in the failure of the Company. In addition, the Company operates in an industry with significant competition. The Company's business plan does not rely on intellectual property rights owned by the Company, other than with respect to the IZOLA trade name. As a result, there is little intellectual property protection of the Company's business plan, and competitors may develop competitive products that gain market acceptance. Competition could result in lost sales, pricing pressures, reduced margins or the failure of the Company to achieve or maintain market acceptance, any of which could have a material adverse effect on the Company's business, operating results and financial condition.

## **COVID-19 IMPACT**

The ongoing COVID-19 pandemic may impact the Company's ability to generate revenue and/or continue operations. If operations are ceased due to COVID-19 restrictions, the Company cannot guarantee that it will resume operations in the future.

At the time of this Subscription Agreement, the region and world are experiencing an ongoing pandemic caused by the COVID-19 virus. On the advice of public health officials, government authorities and regulators have in the past taken various actions to mitigate the spread of COVID-19, including requiring businesses to implement safety measures (social distancing, mask wearing), encouraging remote working, and ordering the shutdown of 'non-essential' businesses. While many restrictions have been lifted, they will continue to impact business operations for the foreseeable future and new requirements could be imposed at any time. It is impossible to predict what long-term impacts the COVID-19 pandemic or similar public health emergencies may have on the Company or this investment.

## **CERTAIN TAX MATTERS**

The Manager has elected that the Company be classified as a C corporation for Federal income tax purposes. As a C corporation, Company profits will be subject to double taxation (meaning that income earned by the Company is taxed at the entity level and, thereafter, remaining profits distributed to the holders of Units as dividends will be subject to income tax on the personal level). At any time, if deemed advisable by the Manager, the Manager shall have the right to cause (a) the Company to be converted from a limited liability company to a C Corporation, or (b) to merge the Company into a corporation that is per se taxed as a corporation or consolidate with another entity with the resulting entity being a corporation that is per se taxed as a corporation, in each case solely for the purposes of converting to a corporation that is per se taxed as a corporation and not to effect any change in ownership of the Company. If, at some point, the Manager elects that the Company be classified as a partnership, each Member will be subject to income tax each year on his, her or its allocable share of the income or gains (if any) of Company, even if no cash distributions are made by the Company to the Member or cash distributions made by the Company to the Member are not sufficient to pay taxes.

*The foregoing list of Risk Factors is not a complete explanation of the risks involved in an investment in the Company. Investors should consult their own legal, tax and investment*

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*advisors before deciding whether to invest in the Company.*

# **EXHIBIT 2**

# **AFFILIATE TRANSACTIONS DISCLOSURE**

- IZOLA plans to open a second location at 3320 & 3326 Fairmount Avenue, San Diego, CA 92105 (the “**New Location Property**”). 3320 Fairmount LLC (“**Property Owner**”), which is co-owned by Brown and Chen, has acquired the New Location Property. Property Owner and the Company have entered into a Commercial Lease dated as of August 1, 2022, amended by that certain Addendum to Commercial Lease and that certain First Amendment to Commercial Lease, pursuant to which the Company has the right to lease the New Location Property for 25 years (collectively, the “**Affiliate Lease**”). A copy of the Affiliate Lease is included in the Offering Materials. The Affiliate Lease is available to Investors upon request. The Affiliate Lease may be amended from time to time in accordance with the provisions of the Operating Agreement related to Affiliate Transactions.

- Property Owner entered into certain loans allowing Property Owner to borrow up to an aggregate principal amount of $2,005,000 to finance the acquisition of the New Location Property, the construction of certain improvements to the New Location Property and other specified costs (“**New Location Financing**”). The Company, Brown, and Chen are each joint and several guarantors of the New Location Financing. The Affiliate Lease is subordinate to the lien of the New Location Financing. Certain New Location Financing documents will be made available to Investors upon request.

- Based on the current budget for the construction of tenant improvements on the New Location Property, the funds necessary for such contraction are being funded by the proceeds of the New Location Financing and capital provided by the Property Owner. Any tenant improvement costs over the current budget shall be funded by the Company as further set forth in the Affiliate Lease. Any funding of the tenant improvements by the Company will benefit the New Location Property and, therefore, indirectly inure to the benefit of Chen and Brown personally, as co-owners of the Property Owner. Please refer to the use of funds described in the Offering Materials.

- The Operating Agreement of the Company allows the Manager to receive compensation for performing management duties, in such amounts as are determined in good faith by the Manager to be reasonable under the circumstances. The Operating Agreement also permits the Company to enter into contracts, agreements, and business dealings with Members and Affiliates which contain provisions and conditions which in the aggregate are substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members or Manager.

- The Company is currently paying to the Manager (co-founder Jeffrey Brown) compensation of $16.30 per hour. The Company is also paying compensation to Jennifer Chen (co-founder) of $16.30 per hour for her services as an executive of the Company. It is

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anticipated that such compensation may be adjusted from time to time (and may be changed from per hour compensation to an annual salary with benefits) based on the success of IZOLA, market conditions, compensation paid to others for similar services, and other factors, as determined by Manager in his good faith discretion.

o The Company has agreed to pay Jeffrey Brown (Manager and co-founder) and Jennifer Chen (executive and co-founder) performance bonuses of up to $195,000 in the aggregate. The Manager shall determine the final amount and timing of the bonus payments based on the Company’s ability to pay the performance bonuses as determined by Manager, in Manager’s sole good faith discretion, provided that the total of the performance bonuses both to Brown and Chen shall not exceed $195,000 in the aggregate.

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**Attachment 7:** `izola4_page.pdf`

3/13/21, 3:57 PM

Invest in IZOLA | Croissants | Wild Sourdough in San Diego, CA

IZOLA is not accepting investment.

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Women-ownedLGBTQ-owned

IZOLA

Croissants | Wild Sourdough

710 13th St

San Diego, CA 92101

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IZOLA previously received $1,099,400 of investment through Mainvest.

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Discussion

This is a preview. It will become public when you start accepting investment.

THE PITCH

IZOLA is seeking investment to accelerate our growth and amplify our justice driven mission. Love IZOLA?...Become an owner via our Equity Offering.

Generating RevenueExpanding Location

THE INVESTMENT OPPORTUNITY - QUICK START GUIDE

Jenny and Jeffrey are deeply grateful to the IZOLA Community. We are fortunate to be a beloved hyper-local brand, now developing a path toward becoming a regional and national company that is changing the way America experiences Croissants and Sourdough - through super high-quality products, served hot from the oven, with amazing customer service.

Where are we now?

And where are we headed?

How will investments be used?

PRESENT: We have one bakeshop in San Diego where guests drive from LA, fly from Vegas and come from all over San Diego County to get a croissant. We've grown from making 12 croissants a day to 1000, by hand. We still sell out daily and try our best to provide an amazing experience even when we don't have anything left to feed guests. And now we're ready to take the next step.

FUTURE: We're building a state-of-the-art dough innovation center and bakeshop called IZOLA Main. It's the beating heart that will feed a dozen IZOLA Bread Cafes throughout Southern California, plus retail and direct-to-consumer channels. It will be powered by technology enhancements like -

FOOD TECHNOLOGY: We are automating our croissant and sourdough production with cutting-edge equipment from the USA, Japan, Germany + the Netherlands. Our tests show the ability to raise our production by 10-20x and improve our quality.

OPERATIONS TECHNOLOGY: Develop scalable, enterprise-grade technology. My beloved Jenny, co-founder, and powerhouse COO, built the IZOLA Operating System (izOS). It tracks every croissant and sourdough loaf on its multi-day journey from production all the way through the bake so it arrives hot from the oven to your plate every time. Now it's time to rebuild our existing software workflow on a more robust and scalable platform.

ORDERING TECHNOLOGY: We want to make it fun and seamless to order hot croissants. One-click for bread and it will point you to the nearest IZOLA where your hot from the oven order will be waiting for you when you arrive.

WHY? We want to improve our guest experience, enhance wages and the workplace for our team and lessen our environmental impact while increasing our profit margins and the quality of our Croissants and Sourdough.

GUIDING PRINCIPLES: We are Justice Driven. For us, that means taking action on Environmental, Racial, Sexual Orientation, Economic, and Gender Justice. It's in IZOLA's DNA...so much so that we added it to our Operating Agreement.

https://mainvest.com/bizola-san-diego

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Invest in IZOLA | Croissants | Wild Sourdough in San Diego, CA

# JENNY AND JEFFREY'S HINTS FOR NAVIGATING IZOLA'S EQUITY PORTAL

Visit the "Data Room" link above. It's a great place to:

Check out "The Numbers!"

Review risks for investors

Read important information about the offering. In particular, I recommend you read the following very, very carefully:

Offering Memorandum

Investor Agreement

Learn how IZOLA is structured: Click the "Operating Agreement" button.

# WHAT DOES YOUR INVESTMENT BUY?

Shares of IZOLA. You will own a piece of the company, the same class of stock as Jenny and me.

In a nutshell, if our shares increase in value, so will yours. If we fail, we'll both likely lose all our investment.

If you invest, you'll join the LLC as a member, though you will have no decision-making authority.

If you have questions, please post them in the discussion section or call/email me directly at 619-227-2701 or jb@izolabakery.com.

If you decide to invest, enter the amount above and press the Invest button.

Thank you for considering joining IZOLA on our journey.

# PRESS

IZOLA named #1 bakery in the US

A little bakery in a historic East Village loft was named best in the U.S. by Yelp.

New York Times Croissant Day Coverage Calls Out IZOLA as "One of America's Best"

Top 5 croissants in the US are in Cali. IZOLA's in the mix.

Izola Bakery Is On a Mission to Build A Cathedral of Bread

Read the story of how a pair of baking hobbyists turned a pandemic side hustle into a croissant empire in San Diego, starting with only 12 croissants a day.

East Village IZOLA bakery's warm bread is coming right down, by basket...out the window

# OUR MISSION

IZOLA is changing the way AMERICA thinks about and experiences sourdough bread and croissants. Ambitious? Absolutely! Doable? Maybe, just maybe with your help.

Quality: Everything we make is served hot from the oven from the best-tasting ingredients, made with time-honored, multi-day techniques.

Hospitality: We delight our customers - San Diego's Only Google 4.9 Star Bakery (with 660+ reviews) - check out our reviews, https://rb.gy/f2lplg

Justice: We practice environmental, racial, gender, economic, and sexual orientation justice.

Impact: Similar to Starbucks with coffee, we envision changing the conversation about what is good bread and croissants nationwide.

HOT FROM THE OVEN CROISSANTS AND SOURDOUGH...SERVED WITH ELEVATED HOSPITALITY

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# THE PROBLEM

Bakeries are not keeping up with customer desires.

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Baked hours (or days) before eating: Would you prepare dinner for a loved one at 9am and let it sit on the counter until 6pm, as it got cold and stale? Mediocre ingredients: Most bakeries use generic ingredients lacking in flavor and nutrients, with chemical additives to speed production and lower cost.

Poor customer service: Treated like a transaction? I've felt it, I bet you have too. Not worth it, even if the food is great.

# OUR SOLUTION

We're reinventing the American bakery.

Superior product: The very best tasting ingredients - Organic milk and flour. Free-range eggs. Butter from Normandy. We are automating our 4-day traditional croissant recipe to improve quality and profit margins.

Elevated hospitality: At IZOLA Bakery all people are seen, heard & valued. Community blossoms, guests linger to eat, talk, and listen to music.

Hot from the oven: All of our croissants and sourdough bread are served hot from the oven. All day...Life changing. And our processes that support them are built from the ground up to be scalable.

# THE RESULTS

2022 was amazing for IZOLA. Thank you team! Thank you guests! And we achieved it all in a converted 3rd-floor photo studio, with no signs, during COVID, open 4 days per week, through word-of-mouth advertising...A Speakeasy for Sourdough.

Achieved Revenue of $1,209,711

IZOLA revenue grew 245% over 2021, growing organically by word of mouth. Even while constrained by the amount of croissants and sourdough we can make (we sell out almost every day).

We were named #1 bakery in the USA https://tinyurl.com/53t5dw42

IZOLA shares tips equally among ALL the staff

We're working toward our Diversity, Equity, and Inclusion Targets. In 2022, our leadership was 37% women, 50% BIPOC, and 25% LGBTQIA+.

In 2023 IZOLA was certified as a Living Wage Employer.

# THE FUTURE

IZOLA NEW CITY HEIGHTS DOUGH FACTORY AND HOT FROM THE OVEN BAKESHOP.

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A high-production, cutting-edge dough factory with elevated hospitality and unique "show baking" guest experiences.

Jeffrey and Jenny purchased a 4790 square foot building and 18,000 sq ft of land in central San Diego with ground floor exposure and parking.

Working with Heleo Architecture and the City of San Diego to re-energize this corner in City Heights. Restore the existing 50-year-old structure and add an additional building to create a dough factory and inviting community space.

Fly through the building in 3D: https://tinyurl.com/ycknxec8 (best on a laptop/desktop)

100% powered by renewable energy.

Supports future expansion: 10-20x increased production capacity will supply up to 12 IZOLA Bread Cafes in Southern California, and Hot-From-The-Oven customer experiences via Grocery Stores, Direct to Consumers and Restaurants.

Unique experience: Guests sit at tables and diner-style counters woven into baking areas. Imagine watching (and smelling) loaves coming out of the oven and croissants being produced on state-of-the-art equipment from around the world.

Improved efficiency: Lower labor costs, and higher profit margins. Improved guest experiences and IZOLA creates 20+ living wage jobs in the City Heights neighborhood.

# THE TEAM

Jeffrey Brown

Founder

# PROFILE

A proven business builder who is passionate about creating fully immersive experiences - from reimagining the bakery industry and serving hot from the oven sourdough and croissants resulting in San Diego's only 5-star bakery to telling Pulitzer-recognized stories through film and photography.

# EXPERIENCE

# FOUNDER

IZOLA Bakery / San Diego, CA / March 2020 - Present

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Reimagined what a bakery could be - handcrafted sourdough and croissants made from the best tasting ingredients, served hot from the oven all day long, in a welcoming community space.

Posted 384% YoY growth through word of mouth and a marketing budget of less than $200/month.

Achieved over 400 five-star reviews on Google through direct customer reach-out campaigns.

Developed proprietary enterprise resource management solution - IZOLA Operating System - allows us to control the journey for 800 croissants + sourdough each day and bake them just a few minutes before customers eat them.

Helms a startup that has reached profitability in less than 2 years.

FOUNDER, DIRECTOR AND EXECUTIVE PRODUCER

Tallgrass Pictures / San Diego, CA / October 1997 - March 2020

A hybrid production company that created both films and still photographs. Clients included Adidas, Citibank, Nike, Dolby Creative Services, New York Magazine, and USA Today.

A full-time staff of 10.

Generated annual 7 figure revenues.

Managed the entire production, including creative, talent casting, location, crew, permits, insurance, and payroll.

Post-production capabilities included ten editing bays, DaVinci Resolve color correction, broadcast calibrated theatre with 100" screen, Dolby 5.1 mixing, broadcast mastering, and nationwide distribution.

Recipient of multiple ADDY awards.

PHOTOJOURNALIST

Copley Newspapers + Jacksonville Journal-Courier / May 1992 - September 1997

Covered natural disasters, world sporting events, and global health issues. Work has graced the front page of USA Today, National Geographic, Life Magazine. Jeffrey was a Pulitzer Prize finalist for work documenting the experience of an immigrant crossing the border from Central Mexico to Chicago.

Jennifer Chen

Co-Founder

PROFILE

Seasoned retail executive with 20 years of experience building multimillion-dollar brands. Consistently delivers double-digit YoY comps through a focus on assortment optimization.

Co-Founder / IZOLA / San Diego, CA

March 2020 - Present

Helped launch a business at the start of COVID that is currently posting a 384% YoY increase and on track to generate $1M in annual revenue.

Key accomplishments:

Created and built a system that allows us to have just-in-time inventory (hot-from-the-oven) ready for pre-order pick-up times and walk-in demand.

Forecasting methods and strategic assortment planning have allowed us to average 3% food waste vs. the double digits typically seen in the restaurant industry.

Associate Director of Merchandising / Brilliant Earth / San Francisco, CA (Remote)

May 2008 - Present (Consultant from 2008-2020)

Lead the merchandising, visual merchandising, and product development strategy of a company that went public in 2021, growing it from $6.5M to $380M; reported to the Senior Vice President of Retail.

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Key accomplishments:

Joined the company when it was a team of 7 and now employs over 500.

Built merchandising department from the ground floor to a team of 14.

Delivered 51% sales growth during the pandemic, generating record profitability.

Doubled brick-and-mortar retail locations in the span of a year.

Led the merchandising integration of a new cloud-based data visualization software.

Established an open-to-buy process, improving in-stock rates, and limited inventory liability.

Senior Merchandise Manager / Provide-Commerce (Red Envelope) / San Diego, CA

Mar 2009 - Mar 2012

Oversaw over half of the total business

Key accomplishments:

Realigned under-performing categories, cut SKU count in half while posting positive YOY sales comps.

Developed a test program for incorporating customer insights into the product development process through focus group research and customer surveys.

Led customization/personalization integration with our two fulfillment centers to ensure holiday readiness.

Buyer / Wal-Mart, Inc / Brisbane, CA

Aug 2005 - Apr 2008

Managed the online jewelry assortment of the nation's largest jewelry retailer.

Key accomplishments:

Drove double-digit comps each year on a $20M business.

Led annual overseas sourcing and product development trips. Oversaw cost negotiations, product development, and sourcing with domestic and overseas vendors

SKU count optimization reduced inventory by 50% while still delivering YoY growth in both sales and GM%.

Implemented new product photography requirements resulting in a drop in return rates.

Developed a high margin closeout channel which generated an additional $250k+ in annual revenue.

Identified and negotiated vendor marketing funds, contributing an additional $100k+ in gross profit annually.

Created warehouse tracking procedures to ensure on-time slotting of inventory; worked closely with QC to deliver the lowest inventory defect rate among all jewelry divisions of Wal-Mart, Inc.

IZOLA: ORIGIN STORY

Jenny and I love pastries and bread warm from the oven...for me, the smells and tastes connect me to my most treasured food and family memories.

In Feb 2020 we were wandering through France in search of the simple, warm, pastries of French legend (and great skiing) when COVID began. As we returned to an anxious San Diego, we could not find hot from the oven bread or pastries anywhere. That is when we decided to bring joy to our community (and ourselves). So with this simple idea, a Kansas farmer's can-do spirit, and a boatload of naivete, we taught ourselves to bake and turned a century-old photo studio into what would become a top bakery in the USA. I remember IZOLA's first day, June 10, 2020, we lowered 12 croissants in a basket out the 3rd-floor window to socially distanced customers waiting below. After their first bite, we saw their faces smiling up at us and realized we'd found our purpose. From that day until now we have been lifted by the grace of so many people. Starting with our heroic team

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pictured above.

Updates

JANUARY 1ST, 2023

2022: Challenges, Wins and Excitement for the future.

Jan 1, 2023

Hi IZOLA Investing Team, Thank you so much for your faith in us and accelerating our growth with your investment.

2022 was an amazing year for IZOLA, our net sales for the year grew 284% to $1,127,598, 5.4% above our projections.

The planning for our new dough production facility and restaurant is well underway. We continue to professionalize our team with the addition of a new Assistant General Manager, and we are investing resources to develop our team's skills and esprit de corps. We've begun to design our new IT system, which will improve customer experience, power our new distribution channels and allow more flexibility and efficiency for our operations team.

Vamos 2023!

Cheers,

Jeffrey + Jenny

JANUARY 1ST, 2023

Gratitude...

TIME TO REFLECT

As this year comes to a close, it's more important than ever to take a moment to reflect on the past and ponder the future. In the speed of our day-to-day lives, it's so easy to miss the little things, and to see the true progress we're making when some days it feels like a half step forward, 3 steps back. I'll be honest with you, today is one of those days where I'm scared and frustrated that I cannot see the full path that lies before me, and so I do what I can and focus on the few steps in front of me.

At this time last year we had just started opening on the weekends. We had also just graduated from our home oven where we were baking 5 loaves of sourdough an hour, to our new Salva deck ovens where we were able to increase our production to 36 loaves every hour. Our small home kitchen no longer looked like a home kitchen anymore (but it was still small!)...

IZOLA 2022 BY THE NUMBERS

Our very first bake of this year we baked out 470 pieces of viennoiserie. For our last bake of this year, 1077 pieces will move through our 150 square foot kitchen.

Over 40,000 boxes were hand-stamped by the front-of-house team and care cards affixed. (The team will be happy to hear that we're working on bringing in a container load of pre-printed boxes at the start of the year!)

We served over 17,000 loaves of sourdough hot-from-the-oven. Each one hand shaped by our 2 person sourdough team.

We more than tripled our output of croissants this year out of the same 100 square foot Dojo space. We filled bellies with over 74,000 croissants this year.

Over 21,000 Tahitian Vanilla Knots were hand cut (it takes 5 cuts per vanilla knot) and braided by our Dojo team. Over 1,200 Tahitian vanilla beans were sliced open and their vanilla caviar scraped out just to create the vanilla-scented dough that forms the base of the Tahitian Vanilla Knot. Even more are prepared for our vanilla icing that enrobes each piece.

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Over 5,000 oranges were zested to perfume our Morning Buns.

And most importantly, the team - the IZOLA team, not including Jenny and myself, invested over 33,000 hours to bring the IZOLA love to our community. "Thank you" does not come close to expressing the gratitude we have for our team...but thank you to our leads and manager, Lea, Jesus, Andy, Spencer, Jose, Mark and Jeff. And thank you to the rest of the team: Aaron, Alejandra, Alyssa, Amaris, Ashley, Manny, Erick, Hayley, Jasmine, Joshua, Kasey, Ky, Larry, Lidia, Luis, Maya, Mitchell, Paris, Ryan, Sadie, Sophia, Stefanie and Tobias.

Since we're on the "thank you's," Jenny and I would like to express our gratitude to our friends and family. We have chosen this path and with that comes sacrifices. Thanks to the friends who keep reaching out to get us to go out for a hike or grab some dinner. Thanks to our families for understanding when we're too tired to hang out or when you catch me dozing off at dinner. We love you and feel so lucky each and every day.

IZOLA:FUTURE

As I look forward to next year, I hope it's filled with more time with our friends and family. But it will also be filled with some other exciting new adventures -

We got creative this year and figured out how to triple production out of our already tiny space. We won't be able to pull off that magic trick again next year though...and that's why I've been focusing my energies on IZOLA Main - our new Dough Innovation Center in City Heights.

I'm looking forward to being back in the City Heights community, just blocks from where Jenny and I used to live, where we will be bringing over 20 purpose-filled careers and incorporating state-of-the-art equipment from the U.S., Germany, Holland and Japan.

With this build, I have a 10-year horizon in mind, which will allow us to increase our production by a factor of 20. It is powered by 100% renewable energy and a bulk ingredient handling system for our organic flour + milk allows us to receive those ingredients with ZERO packaging, saving more 50,000 pounds of paper and plastic from being manufactured each year.

We'll be investing in building our own software system to support our pre-order process which will allow us to take pre-orders weeks in advance and notify you when items are back in stock.

More production capacity and a customer-centric online ordering system will allow us to bring IZOLA to more communities through small square footage IZOLA Bread Cafes, as well as distribution through grocery and mail (yes, East Coasters, we hear ya!).

To help us reach goals of this scale we knew we'd need capital - to provide this kind of investment into the community is expensive, and to provide the same or better quality of food and service is intensive. Typically this level of funding is achieved through venture capital or accredited investors. But it was important to us to make this community-driven and I found a platform that allows us to raise capital directly from our community, giving everyone the chance to become an owner in IZOLA.

Our equity offering is open and you now have the chance to become an owner of IZOLA. We are focusing on creating long-term value: investing far in the future, in state-of-the-art equipment from all over the world, of growing and training our team, in developing our own software to supercharge operations and improve our customer experience. Join over 200 of the IZOLA fam who have already invested and become owners of IZOLA.

https://mainvest.com/b/izola-san-diego

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Do you want to help build something amazing? Join us!

LEARN MORE

DECEMBER 19TH, 2022
IZOLA GOES ON A FIELD TRIP!

The beautiful, tall Cranberry Pecan Sourdough loaf that you see here was made by a machine! Really. It's the tallest Cran we've been able to produce to date.

Some of you have heard me talk about our efforts to scale production and I've also heard some concerns about us doing that. But my promise to the IZOLA family, and this feeling is buried deep inside my soul - we will not make any changes now or in the future that will lower the quality of our bread and croissants. In fact, I think we can continue to push our quality even higher by using automation.

In order for us to achieve our goal of Bread for All - we must find ways to increase our production capabilities while also achieving cost savings that we can then pass onto YOU. And that is why this week, I and some of our team took a trip up to Irvine to run a full test on some bread equipment we're considering for IZOLA: Main.

This was a full team effort - we loaded up the truck with all the materials needed for a 220-loaf test run. Jesus, our sourdough lead, and Jeff, our AGM, spent the day up in Irvine with me as we tested the equipment.

The equipment on the market is not purpose-built for artisanal sourdough and croissants. So the puzzle I'm working with manufacturers on solving, and I believe it's possible, is how to create new equipment that obtains the same level or better quality of the product that we produce by hand today, with the same ultra high-quality organic ingredients. And from this initial test, the results are incredibly promising.

When Jenny and I launched IZOLA at the start of the COVID pandemic, neither of us had ever worked in the food industry and certainly weren't professionally trained. So we spent our days and nights testing and refining - changing one element at a time, whether it was an ingredient, a temperature, a thickness...And this is how we'll achieve IZOLA-level results with the equipment - through hundreds and hundreds of tests.

If you've considered investing in IZOLA, this is a key component of why we're raising funds...the IZOLA Dough Innovation Center in City Heights includes state-of-the-art equipment from the USA, Germany, Holland, and Japan that increases our production by a factor of 20x while also improving our sourdough and croissant quality. It creates 20+ living wage careers in City Heights. It is powered by 100% renewable energy and a bulk ingredient handling system for our organic flour + milk allows us to receive those ingredients with ZERO packaging, saving more than 8,600 pounds of paper and 7,900 pounds of plastic from being manufactured each year. And this type of investment in the community's future is capital-intensive.

JOIN US...

Our equity offering is open and you now have the chance to become an owner of IZOLA. We are focusing on creating long-term value: investing far in the future, in state-of-the-art equipment from all over the world, growing and training our team, in developing our own software to supercharge operations and improve our customer experience. Join 190 of the IZOLA fam who have already invested and become owners of IZOLA.

Do you want to help build something amazing? Join us!

Jeffrey, Jennifer & The IZOLA Team
December 2022

NOVEMBER 27TH, 2022
IZOLA Sales Surge Past $1,000,000

Hi Investors, friends, family and guests,
Last Thursday (11/17) we exceeded $1,000,000 in annual revenue. Super excited and thank you so much to everyone who has supported us along the way. A huge shout out to our team...pls see more below.

And it's just the beginning. When our new production facility is operational in Q4 2023 we'll increase production by a factor of 20x and improve quality. This allows us to feed new distribution channels: IZOLA Bread Cafe's, IZOLA Bake at Home, IZOLA Live Bake Truck.

Let's talk about prices... It's all over the news, it's happening in every one of our lives...prices continue to increase. The good news is that here in San Diego, the minimum wage goes up $1 in the New Year. Woot!

https://mainvest.com/b/izola-san-diego

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With all of these cost increases, we have increased our prices.

At IZOLA everything you eat is handmade, made from the best-tasting ingredients we've been able to find. We tested over 15 different kinds of butter, and over 20 different flours, and tweaked our temperatures and handling techniques hundreds of times to land on our traditional croissant. Our Olive Sourdough is made with whole Castelvetrano and Kalamata olives, whole pecans, and freshly zested lemons (not the frozen stuff) - so you get big olive flavor, crunch and a floral punch in every bite. Our Almond Croissant is made with almond meal (toasted and ground in house), pastry cream made with organic milk and eggs, and you get that in every...single...bite.

Yes, we could make our sourdough and croissants smaller. We could choose to switch over our milk to something less tasty. But each and every decision we've made in crafting our sourdough and croissants has been made with intention - from the ratio of crust to crumb, the amount of brandy syrup in our Almond Croissants, taking the time to let our croissant dough rest overnight rather than use dough conditioners, and perfecting the ratio of the fluffy honeycomb goodness inside our croissants to the outer crispy shell.

We thank you for eating and enjoying the fruits of our teams' labor! They put their heart and soul into their work each and every day.

P.S. - Did you know our entire team shares in the tip pool? When you include a small tip on your order, you're saying thanks to...

The dishwasher who will hand wash over 1500 dishes per shift. An intentional choice to minimize our environmental impact.

The Dojo and Sourdough teams who spend their entire shift on their feet lifting hundreds of pounds of dough from our mixers.

The bake team who come in at 3a to start proofing and spend the next 8 hours hustling to keep our hot ovens fed as fast as possible so that we can feed as many mouths as possible.

Our pantry manager who keeps more than 140 ingredients in stock and the team organized.

And of course our front of house team - some who clock over 5 miles a shift going up and down the stairs delivering orders, and others who pack up to 1000 pieces of IZOLA goodness a day

All our best,

Jeffrey + Jenny
IZOLA Co-Founders.

OCTOBER 4TH, 2022
Wow, we've learned a lot...

Hi Everyone!

Thank you so much for your interest and support of IZOLA. We were named the best bakery in the US in June, and it has been amazing, and also bittersweet. Every one of our systems was overwhelmed when demand increased 400% overnight and lines stretched out the door as far as the street.

But the IZOLA team "leaned in" and worked to improve every single process. Adding a 2nd shift to the Dojo (croissant dough production), adding a 2nd Cash Register, improving the order fulfillment in EXPO station, and Sourdough making more bread...better. And our customers, wow, I am humbled by their patience and unwavering support.

In addition to our duties leading the team, Jenny and I have been working on IZOLA:FUTURE.

We are designing the new Dough Factory and Restaurant in City Heights. It will bring 20+ living wage jobs to the neighborhood, provide inspiring community gathering space, and have the capability to produce up to 12,000 croissants per day and improve our quality and consistency.

And Jenny leads the effort to build IZOLA Operating System 2.0. (iOS 😊) It's an enterprise-grade version of our current technology that tracks each croissant during its 4-day process, tells our bakers what to bake at each moment to provide our customers with hot from the oven pastries and sourdough, and keeps tabs on the "live count" so we know what we have in stock at each moment.

Growth? Wow, I'm humbled again. 308% Check out these sales numbers directly from our Square Terminal. The blue is this year, the grey is last year.

Thank you IZOLA Team. Thank you IZOLA customers. And the biggest thank you to my partner Jenny. There is no one else I'd rather be on this journey with.

Keep an eye on our Mainvest page, Equity Offering 2.0 will be going live soon.

All my best,

https://mainvest.com/bizola-san-diego

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Jeffrey

JULY 1ST, 2022

Jeffrey, Head Baker!

Hi Revenue Sharing Note Investors.

An amazing Q2 for IZOLA. Our square POS is reporting 306% YoY Growth. And Yelp has named IZOLA the #1 Bakery in the US. It's bittersweet honor because it affects customer experience in the short term, but it's pushing us to increase production and provide amazing service in ways we never could have imagined. We're working hard on the design of our new location in City Heights.

Thank you for your support of IZOLA!

Jeffrey + Jennifer

JUNE 11TH, 2022

YELP names IZOLA 2022 Best Bakery in US!

IZOLA is 2 years old today. What an amazing birthday present, we learned that Yelp named us the #1 Bakery in the US Wow! This is something neither Jenny nor I could have ever imagined...

Thank you, IZOLA Family, for going on this journey with us.

JUNE 8TH, 2022

Coming to an End

Our Revenue Sharing Note investment campaign will be ending tomorrow (Wed 6/8), and as it wraps up, I'd like to thank you all so much for the amazing support, your investments will strengthen IZOLA and amplify our mission of justice.

Our Equity campaign will be launching soon on Mainvest, for more information please visit. https://www.izolabakery.com/invest-in-izola

All our best,

Jeffrey + Jennifer

JUNE 1ST, 2022

Great News! May Financial Results

Wow! Let's do the numbers

IZOLA net sales grew 15% to $79,650 in May.

MoM increase of 15%!!!

YoY (to date) increase 310%

Great job IZOLA team!! We're so proud of the work we are doing together.

A few recent customer voices:

MAY 30TH, 2022

IZOLA named "Best Bakery In San Diego"

A huge thanks to the IZOLA community! It has been an honor to collaborate with team members, customers, vendors to bring IZOLA to life. Cheers!
Jeffrey + Jenny

MAY 5TH, 2022

April Performance Update

Hi Everyone!

We had a great month in April! 69k in net sales, 405% growth YoY, 11% growth MoM. Continuing our double digit MoM growth: This compounding growth is hard, kudos to the team for making it happen and finding ways to continue to delight the IZOLA family.

https://mainvest.com/b/izola-san-diego

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A few customer reviews from this week:

Susanne V. La Mesa, CA (Yelp 5 stars) Warm, fresh out of the oven baked goods that are made with incredible quality ingredients! I have enjoyed and been impressed with everything I have eaten from there. Customer service is top notch and there is a sense of pride in all who work there.

Meetal Shah (Google 5 stars) Wonderful morning buns. We ordered a whole batch as our team was flying out the next day back home to the east coast. It was heaps better than anything you find at the airport. Super delicious, well laminated pastry. Just extraordinary. Thanks for making flying bearable. 😊

Jessica Yaffa (Google 5 stars) Literally can't stop talking with people about Izola. I've been to France many times and I'm not kidding when I tell you that the Izola pastries blow anything I've had in Paris out of the water! I've been twice now in two weeks and dream about these goodies on the days in between visits. Insane!!

Thank you for your support everyone!

Cheers,

Jeffrey + the IZOLA Team

This is a preview. It will become public when you start accepting investment.

Data Room

Intended Use of Funds

Target Raise

Maximum Raise

Real Estate Acquisition & Improvement $13,000

Croissant & Sourdough Equipment Upgrade $22,000

Development of Distribution Channels $24,000

Hiring, Training, and Team Salaries $11,000

Software Development $13,000

Cash reserves $11,000

Mainvest Compensation $6,000

Total $100,000

Financial Forecasts

Year 1 Year 2 Year 3 Year 4 Year 5

Gross Sales $2,400,000 $5,831,000 $9,300,200 $14,498,390 $25,003,606

Cost of Goods Sold $1,632,000 $3,014,627 $4,715,201 $6,901,234 $11,402,644

Gross Profit $768,000 $2,816,373 $4,584,999 $7,597,156 $13,600,962

EXPENSES

Non-Controllable $254,640 $588,575 $929,882 $1,429,742 $2,182,814

Controllable $439,920 $1,185,442 $1,844,230 $2,831,536 $4,883,204

Operating Profit $73,440 $1,042,356 $1,810,887 $3,335,878 $6,534,944

This information is provided by IZOLA. Mainvest never predicts or projects performance, and has not reviewed or audited this financial forecast.

Please see below for additional risk disclosures.

Documents

Offering Memorandum

Investor Agreement

Appendix A - Risk Factors.pdf

Appendix B - Audited Financials.pdf

Appendix C - Operating Agreement.pdf

Appendix D - Articles of Organization.pdf

Appendix E - Affiliate Lease.pdf

Investment Round Status

Target Raise $100,000

Maximum Raise $3,900,600

Amount Invested $0

Investors 0

Investment Round Ends March 1st, 2024

Summary of Terms

Legal Business Name Tallgrass Pictures LLC

Minimum Investment Amount $1,000

https://mainvest.com/b/izola-san-diego

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Description of Securities

Key Terms:

Structure of Security - LLC Membership Units
LLC Membership Units Outstanding - 12,717,500
LLC Membership Units Available in Offering - 1,950,300
Price Per Unit - $2.00
Minimum investment amount - $1,000
Total Offering Amount - $3,900,600
Minimum Offering Amount - $100,000

Tallgrass Pictures, LLC (the "Company") is offering to Investors an opportunity to purchase Membership Units ("Units") in the Company. The minimum investment amount per Investor is $1,000.00.

None of the Units will be sold unless offers to purchase at least the target offering amount identified in the Form C, together with the properly completed Subscription Agreement are received by the close of the Offering. The securities sold are limited liability company membership interests in the Company (referred to as "Units" in the Offering), fully paid-up and entitled to all rights and privileges of participation, information, voting and dividends, and other privileges, without limitation, as other Units of the Company outstanding as of the date of the Offering as described in the Company's Operating Agreement accompanying the Form C as Appendix C and Subscription Agreement filed with the Securities and Exchange Commission.

The purchase price of each Unit is $2.00, and the Company with a minimum purchase amount of 500 Units for a minimum investment amount of $1,000

Investors will become members of the LLC, there is currently one class of shares, so investors will enjoy the benefits and risks of ownership. Most small businesses fail so the most likely outcome is that an investors' entire investment will be lost. However, if IZOLA succeeds, the possible outcomes include, but are not limited to: Investors will receive a pro rata share of profits distributed (note this is a very young, rapidly growing company and we don't expect to distribute any profit for 10 years), if the company is sold in part or in full, the investors shares may be sold along with any or all other shares and may see a gain or a loss on their initial investment and if IZOLA goes public investors shares could become liquid and may see a gain or a loss on their initial investment.

Financial Condition

Historical milestones

IZOLA has been operating since June 2020 and has since achieved the following milestones:

Opened 1st IZOLA location in San Diego, CA June 2020.

2020: Achieved revenue of $135,774.

2021: Achieved Revenue $351,183

2022: Achieved Revenue of $1,209,711

Historical financial performance is not necessarily predictive of future performance.

Risk Factors

EXHIBIT 1

CERTAIN RISK FACTORS

In addition to the risk disclosures set forth in the Subscription Agreement and in the offering materials, as supplemented from time to time ("Offering Materials"), available to the undersigned on the Tallgrass Pictures LLC ("Company") offering profile at https://www.mainvest.com, each purchaser of Units in the Company (referred to herein as "Investor" or "you," or collectively as "Investors") is urged to carefully consider the risk factors discussed below and to consult its own advisors with respect to the offering of Units by Company (the "Offering") prior to making an investment.

The rights and obligations of the Members of the Company are set forth in the Operating Agreement of Tallgrass Pictures LLC ("Operating Agreement"). A copy of the Operating Agreement is included as Appendix C of the Offering Materials. Investors are encouraged to review the Operating Agreement and the other Offering Materials before making an investment. Any capitalized terms not defined herein shall have the meanings set forth in the Operating Agreement.

In addition to their own investigation and examination of the Company, the Manager, the Offering Materials, the market and other risks, Investors in

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the Company should consider, among other things, the following (with the understanding that the inclusion of specific special considerations and risk factors in this Subscription Agreement should not be construed to imply that each area of potential risk has been described in complete detail, or that there are no other special considerations or risk factors that apply to an investment in the Company).

The Company's current business of owning and operating IZOLA artisanal bakeries and the marketing, licensing and sale of products and services using the IZOLA's trade name will be referred to below as "IZOLA."

# THE UNITS ARE A SPECULATIVE INVESTMENT; YOU MIGHT LOSE YOUR MONEY

The Company's current business, the development and operation of IZOLA artisanal bakeries, is in the early stages of its development on which to base an evaluation of its business and prospects. Investors in the Company should understand that the market for IZOLA's products and services has not been tested beyond IZOLA's initial retail location and many variables, both anticipated and unanticipated, may affect the success of IZOLA. No assurance can be given as to the ultimate success of IZOLA, as to its ability to generate revenues or as to how soon, if ever, the purchasers of Units may receive a return on their investment.

# RISKS OF UNDERCAPITALIZATION AND ADDITIONAL CAPITAL RAISES

IZOLA currently has a limited sales history. Without robust sales, IZOLA will rely almost entirely on the proceeds from the Offering to fund growth of its operations. The Company anticipates that it will seek to raise additional capital from time to time. A financing may involve incurring debt or selling equity securities to raise money to pay for operating expenses, to implement IZOLA's business strategy or to otherwise maximize the opportunities available to IZOLA. The Company cannot assure Investors that additional financing will be available to IZOLA on commercially reasonable terms, or at all. If the Company raises capital through the sale of equity securities, the percentage ownership of the Members could be diluted. In addition, any new equity securities may have rights, preferences or privileges senior to those of the holders of the Company's outstanding Units at the time of such investment. If the Company is unable to obtain additional financing, its ability to fund its operations and execute its business plan could be materially adversely affected and Investors could lose all or a significant portion of their investment. The Company's inability to adequately fund its business development would also harm its ability to earn revenues.

# LIMITED SERVICES

IZOLA operates with a very limited scope, offering only particular goods and services to customers, making them vulnerable to changes in customer preferences.

# LACK OF ACCOUNTING CONTROLS

Larger companies typically have in place strict accounting controls. Smaller companies typically lack these controls, exposing themselves to additional risk.

# COMPETITION

The market in which the Company operates is highly competitive and could become increasingly competitive with new entrants in the market. IZOLA competes with many other businesses, both large and small, on the basis of products offered, quality, price, location, and customer experience. Changes in customer preference away from IZOLA's core business or the inability to compete successfully against other competitors could negatively affect the Company's financial performance.

# RELIANCE ON MANAGEMENT

As a securities holder, you will not be able to participate in the Company's management or vote on and/or influence any managerial decisions regarding the Company, including decisions relating to IZOLA. Furthermore, if the founders or other key personnel of the Company were to leave the Company or become unable to work, the Company (and your investment) could suffer substantially.

The Company's success will be dependent, in part, upon the services of its senior management, currently Jeffrey Lamont Brown ("Brown") and Jennifer Chen ("Chen"). The Company does not currently have written employment agreements with its senior management. The loss of the services of one or more members of senior management could have a significant adverse effect on the Company's business, operating results and financial condition.

# FINANCIAL FORECASTS RISKS

The financial forecasts provided to Investors by the Company are forecasts by the Company based upon assumption of stable economic conditions and other various assumptions regarding operations. The validity and accuracy of these assumptions will depend in large part on future events over which the Company and the key persons will have no control. Changes in assumptions or their underlying facts could significantly affect the forecasts. To the extent that the assumed events do not occur, the outcome may vary significantly from the projected outcomes. Consequently, there can be no assurance that the actual operating results will correspond to the forecasts provided herein. Additionally, IZOLA is a newly established business and therefore has limited operating history from which forecasts could be projected.

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IZOLA's limited operating history makes financial forecasting highly speculative. Because of the speculative nature of such forecasting, future operating results will undoubtedly differ materially from any forward-looking or "pro forma" forecasts and financial projections which may have been provided to Investors by the Company. Investors are therefore cautioned against relying on any such forward-looking statements or financial projections as a prediction of future results.

# INABILITY TO SELL YOUR INVESTMENT

The law prohibits you from selling your securities (except in certain very limited circumstances) for 12 months after you acquire them. Even after that one-year period, a host of Federal and State securities laws may limit or restrict your ability to sell your securities. Even if you are permitted to sell, you will likely have difficulty finding a buyer because there will be no established market. In addition, the Operating Agreement restricts the transfer of Units. Given these factors, you should be prepared to hold your investment for its full term.

IZOLA anticipates that for the foreseeable future it will retain and reinvest any profits from operations back into the business to fund growth and expansion. Therefore, even if the Company is profitable, it is not likely to make any cash distributions to Investors for some time.

Each Investor will be required to represent that (i) the Units are being acquired for investment and not with a view to distribution or resale, (ii) such Investor understands the Units are not freely transferable and (iii) such Investor must bear the economic risk of the investment for an indefinite period of time because the Units: (a) have not been registered under the Securities Act or applicable state "Blue Sky" or securities laws; and (b) cannot be sold unless they are subsequently registered or an exemption from such registration is available and such subscriber complies with the other applicable provisions of the Operating Agreement. There will be no market for the Units and Investors cannot expect to be able to liquidate their investment in case of an emergency. Further, the sale of the Units may have adverse federal income tax consequences (the potential purchasers are strongly advised to seek counsel from his or her tax and financial advisor with respect to an investment in the Company). A Member of the Company will be permitted to assign or sell its interest in the Company only in very limited circumstances, as more fully set forth in the Operating Agreement.

# THE COMPANY MIGHT NEED MORE CAPITAL

The Company might need to raise more capital in the future to fund/expand operations, buy property and equipment, hire new team members, market its services, pay overhead and general administrative expenses, or a variety of other reasons. There is no assurance that additional capital will be available when needed, or that it will be available on terms that are not adverse to your interests as an investor. If the Company is unable to obtain additional funding when needed, it could be forced to delay its business plan or even cease operations altogether.

# THE PRICE OF THE UNITS WAS DETERMINED ARBITRARILY

The purchase price of the Units have been determined primarily by the anticipated capital needs of the Company and bears no relationship to any established criteria of value such as book value or earnings per Unit, or any combination thereof. There has been no independent or professional valuation of the Company for the Offering.

In 2022, Brown gifted 20% of his Units (2,400,000 Units) to Chen based on a value of $.01 per Unit.

The initial round of the Offering closed on July 2, 2022. The price for the Units during the initial round was $1.00 per Unit. The Offering was extended to August 30, 2023 and the price for the Units was increased to $2.00 per Unit, which is twice the sale price of the Units in the initial round of this Offering.

# THE INTENDED USE OF PROCEEDS IS ANTICIPATORY AND MAY BE SUBJECT TO CHANGE

The net proceeds to the Company from the sale of the Units are anticipated to be used as set forth in those certain offering materials (as supplemented or amended from time to time) (the "Offering Materials") available to the undersigned on the Company offering profile at https://www.mainvest.com. The Investor understands the use of funds described in the Offering Materials are anticipated uses only and that the Manager retains broad discretion to reallocate the proceeds of the Offering as the Manager deems necessary or appropriate to suit the needs of the Company as circumstances evolve. The failure of the Manager to apply such funds effectively could have a material adverse effect on the Company's business, results of operations and financial condition. The Company currently anticipates that it will retain future earnings, if any, for use in the operation and expansion of the Company's business (and the payment of certain debt) and, therefore, the Company does not anticipate declaring any distributions to Members in the foreseeable future.

# CHANGES IN ECONOMIC CONDITIONS COULD HURT THE COMPANY

Factors like global or national economic recessions, changes in interest rates, changes in credit markets, changes in capital market conditions, declining employment, changes in real estate values, changes in tax policy, changes in political conditions, and wars and other crises, among other factors are unpredictable and could negatively affect the Company's financial performance or ability to continue to operate. In the event the Company ceases operations due to the foregoing factors, it cannot guarantee that it will be able to resume operations or generate revenue in the future.

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# NO REGISTRATION UNDER SECURITIES LAWS

The Offering of the Units will not be registered with the Securities and Exchange Commission under the Securities Act or the securities agency of any state, and the Units are being offered in reliance upon an exemption from the registration provisions of the Securities Act and state securities laws ("Regulation Crowdfunding Exemption"). Since this is a nonpublic offering and, as such, is not registered under federal or state securities laws, Investors will not have the benefit of review by the Securities and Exchange Commission or any state securities regulatory authority. If the Company should fail to comply with the requirements of the Regulation Crowdfunding Exemption, Investors may have the right, if they so desired, to rescind their purchase of the Units. It is possible that one or more Investors seeking rescission would succeed. If a number of Members were successful in seeking rescission, the Company would face severe financial demands that would adversely affect the Company as a whole and, thus, the investments in the Company by the remaining Members.

# INCOMPLETE OFFERING INFORMATION

Title III of the JOBS Act does not require the Company to provide investors with all the information that would be required in some other kinds of securities offerings, such as a public offering of shares (for example, publicly traded firms must generally provide investors with quarterly and annual financial statements that have been audited by an independent accounting firm). Although Title III does require extensive information, it is possible that Investors in the Company would make a different decision if they had more information.

# LACK OF ONGOING INFORMATION

The Company will be required to provide some information to Investors for at least 12 months following the Offering. However, this information is far more limited than the information that would be required of a publicly-reporting company; and the Company is allowed to stop providing annual information in certain circumstances.

# UNINSURED LOSSES

Although the Company will carry some insurance, the Company may not carry enough insurance to protect against all risks to the business. Additionally, there are some kinds of risks that are very difficult or impossible to insure against, at least at a reasonable cost. Therefore, the Company could incur an uninsured loss that could damage its business.

# CHANGES IN LAWS

Changes in laws or regulations, including but not limited to zoning laws, environmental laws, tax laws, consumer protection laws, securities laws, antitrust laws, and health care laws, could negatively affect the Company's financial performance or ability to continue to operate. Specifically, any additional regulation on the industry could significantly negatively affect the Company's business.

# CERTAIN FINANCING RISKS REGARDING EXPANSION TO SECOND LOCATION

IZOLA plans to open a second location at 3320 & 3326 Fairmount Avenue, San Diego, CA 92105 (the "New Location Property"). 3320 Fairmount LLC ("Property Owner"), which is co-owned by Brown and Chen, has acquired the New Location Property. Property Owner and the Company have entered into a lease agreement pursuant to which the Company shall lease the New Location Property for approximately 25 years ("New Location Lease"). Property Owner entered into certain loans allowing Property Owner to borrow up to an aggregate principal amount of $2,005,000 to finance the acquisition of the New Location Property and the construction of certain improvements to the New Location Property ("New Location Financing"). The Company, Brown, and Chen are each joint and several guarantors of the New Location Financing. If the Company does not generate sufficient revenues to pay the rent under the New Location Lease and the Company is unable to raise additional financing (whether debt or equity) to make the rental payments, then such failure to pay rent may result in a default under the New Location Lease resulting in the loss of the Company's leasehold interest in the New Location Property, as well as liability to the Property Owner for damages under the terms of the New Location Lease. In addition, failure to pay the rent under the New Location Lease may result in the Property Owner not having the resources to pay the loan payments under the New Location Financing which may result in, among other things, a default under the New Location Financing, the foreclosure by the lender of the New Location Property, the termination of the New Location Lease and the Company's leasehold interest in the New Location Property, and a collection proceeding for the unpaid balance of the New Location Financing plus damages against the Company under its joint and several guaranty of the New Location Financing. Any of the foregoing may result in the possible loss by Investors of all or a significant portion of their investment.

# AFFECTS OF NON-COMPLIANCE WITH CURRENT DEH PERMIT

Currently, IZOLA is licensed to sell food to consumers from its current location at 710 13th Street (Ste 300) San Diego, CA, under a Class B Cottage Food Permit issued by the Department of Environmental Health and Quality Food and Housing Division (the "DEH"). The Class B Cottage Food Permit requires that a permittee have no more than one full-time equivalent employee (other than owners and their immediate family and household members) and no more than $50,000 in annual revenue. IZOLA currently exceeds those limitations (IZOLA currently has 16 full-time employees and generates approximately $150,000 in monthly revenue). IZOLA understands that to receive a new permit to accommodate its current business operations, it will have to renovate its kitchen at the current location, which will include, among other things, new flooring, new wall covering,

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additional plumbing, and a dedicated dishwashing area. IZOLA has submitted renovation plans to the DEH and is awaiting approval. Once approved, IZOLA intends to get bids and suspend operations at the bakery during construction and until the new permit is issued. Since many aspects of the construction and permitting process are outside of IZOLA's control, IZOLA cannot guarantee that the new permit will be issued within a specific amount of time. The new permit does not have revenue or employee headcount limitations.

The DEH could demand immediate compliance with the Class B Cottage Food Permit until the new permit is issued. If that comes to pass, IZOLA may have to reduce the scope of its operations until it is in compliance with the Class B Cottage Food Permit or suspend operations until the renovations are complete and the new permit is issued, which may adversely impact its revenue projections. It is also possible that the renovations and/or securing the new permit may take longer than anticipated, which will also adversely affect its revenue projections. Further, the DEH has the authority to fine IZOLA up to 3x the cost of the new permit or $2,790 total. Management believes that any short-term suspension or reduction in its operations due to the expected time to renovate and receive the new permit, or any monetary penalty related to its non-compliance with the Class B Cottage Food Permit, will not have a material long-term impact on IZOLA's operations. However, this may not be the case if IZOLA is forced to close the bakery or materially reduce its operations for an extended period of time.

# CONFLICTS OF INTEREST WITH COMPANIES AND THEIR MANAGEMENT

The Operating Agreement permits the Company to enter into contracts, agreements, and other business dealings with Members and Affiliates (as defined in the Operation Agreement) ("Affiliate Transactions") which contain provisions and conditions which in the aggregate are substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members or Manager ("Affiliate Transaction Requirements").

The Company has entered into certain material Affiliate Transactions which are set forth in Exhibit 2 of Subscription Agreement. These Affiliate Transactions constitute a conflict of interest between Brown, Chen, and Property Owner (which is owned by Brown and Chen), on the one hand, and the Company, on the other hand. While the Company believes that the provisions and conditions of the Affiliate Transactions meet the Affiliate Transaction Requirements considering all of the relevant circumstances, including those relating to the acquisition and financing of the New Location Property, the development of the New Location Property, the leasing market, and the requirements of the Company to successfully pursue its business plan, the terms of the Affiliate Transactions may not be deemed to meet the Affiliate Transaction Requirements if challenged by one or more Members of the Company.

Brown has personally guaranteed an SBA loan made to the Company; the Company, Brown and Chen have jointly and severally personally guaranteed the New Location Financing; and Brown and Chen may elect to guaranty future loans to the Company (as applicable). As Manager, Brown will have the discretion as to how to allocate the resources of the Company, including whether to pay down debt personally guaranteed by Brown and/or Chen. Brown may cause the Company to pay down this debt instead of using the funds for other business purposes, including business purposes that an Investor may believe is a better use of such funds, such as distributions to Members or investment in sales, marketing or new equipment.

Since the Company and Property Owner are jointly and severally liable under the New Location Financing, Brown's decisions on behalf of the Company may be compromised by his and Chen's financial interest in Property Owner (Brown and Chen currently each have a 50% ownership interest in Property Owner).

The agreements governing the Affiliate Transactions may not address or may leave some discretion to the Company and the Property Owner as to how to address certain issues that may arise from time to time with respect to, among other things, the financing and development of the New Location Property and the operation of IZOLA at the New Location Property. Where such discretion exists, Brown and Chen, as the managing members of Property Owner, may generally make decisions that benefit the New Location Property to the detriment or expense of the Company with respect to the Affiliate Transactions.

Generally, an Investor's interests and the interests of the Company's management should coincide: However, an Investor's interests might be in conflict not only in the areas described above, but in other important areas, including these: An Investor might want the Company to act conservatively to maximize the chances or size of distributions to the Investors, while the Company might prefer to spend aggressively to grow the IZOLA business. An Investor may desire to keep the compensation of managers lower than what the managers believe is fair compensation for their services.

An Investor should thoroughly consider the actual and potential conflicts of interest that exist, and the risks relating thereto, before making an investment in the Company.

# FUTURE INVESTORS MIGHT HAVE SUPERIOR RIGHTS

The Manager has the power, without the vote of the Members, to create classes of membership interests or units having rights, powers, and duties superior to the Units to be purchased by Investors, including, without limitation, the right to be paid before holders of such Units, the right to receive larger distributions than the holders of such Units, or the right to have a greater voice in management than holders of such Units. Such superior rights may, among other things, have a materially adverse effect on the value of the Units purchased an Investor.

Any company whose securities are listed on a national stock exchange (for example, the New York Stock Exchange) is subject to a number of rules

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about corporate governance that are intended to protect investors. For example, the major U.S. stock exchanges require listed companies to have an audit committee made up entirely of independent members of the board of directors (i.e., directors with no material outside relationships with the Company or management), which is responsible for monitoring the Company's compliance with the law. The Company will not be required to implement these and other investor protections.

# THE COMPANY IS SUBJECT TO THE CONTROL OF THE MANAGER AND THE OWNER OF A MAJORITY OF THE UNITS

The Company is a "manager-managed limited liability company" as defined in the California Revised Uniform Limited Liability Company Act, currently codified in the California Corporations Code, Sections 17701.01-17713.13, as the same may be amended from time to time. Manager will have the right to make all day-to-day decisions and most major decisions with respect to the management and operation of the business and affairs of the Company. The Members will have only very limited rights of approval of Company matters as set forth in the Operating Agreement. When Member approval is required under the Operating Agreement a majority of the outstanding Units can generally approve such decisions. As of the date hereof, Brown is the Manager and is also the holder a majority of the Units. As a result, Brown has very broad authority to act on behalf of the Company and minority Members in the Company will have very limited rights to limit or curtail Brown's actions. In addition, while Brown is the Manager of the Company, he may not be removed as the Manager under any circumstances unless a majority of the Units entitled to vote (excluding any Units owned by Brown) establishes, pursuant to a formal judgment by a court of law, that Brown has committed fraud pertaining to the performance of his duties as Manager.

# THE BUSINESS PURPOSE OF THE COMPANY INCLUDES PURPOSES THAT MAY NOT BE OPERATING FOR PROFIT

While the principal business activity and purpose of the Company is the ownership and operation of IZOLA's bread cafes and the marketing, licensing and sale of products and services using the IZOLA's trade name, or any successor trade name, an additional business and purpose of the Company, which may not be operated for profit purposes, is the promotion of social and environmental change by supporting positive business practices, as determined by the Manager, including reducing inequality, lowering poverty levels, creating more sustainability for our environment, and building stronger communities. Accordingly, an investment in the Company may not be suitable for an investor who only wants to invest in a business that has a pure profit motive or who does not share the objectives of the Manager regarding supporting social and environmental change in this manner.

# MEMBERS INCLUDING THE MANAGER MAY ENGAGE IN OUTSIDE BUSINESS ACTIVITIES

The Manager will not be required to devote any fixed amount of time to the affairs of the Company. The Members, including the Manager, are permitted to continue to engage in other business activities and are not obligated to present to the Company or Investors any particular investment or opportunity, even if the opportunity is of a character which, if presented to the Company, could be taken by the Company. As a result, the Manager or Members could divert opportunities away from the Company and reduce the potential returns resulting from the investment.

# THE UNITS ARE UNCERTIFICATED

Except as otherwise determined by the Manager, in Manager's discretion, the Units shall be uncertificated and a listing of the registered holders on the books and records of the Company shall be maintained solely on the registrar of the Company's membership interests and, if applicable, in the book-entry account system of any transfer agent appointed by the Company.

# DISPUTES RELATING TO THE UNITS AND OPERATING AGREEMENT TO BE ARBITRATED

In most circumstances, binding arbitration shall constitute the sole and exclusive remedy for the settlement of any dispute or controversy concerning the Operating Agreement and the rights of Investor under the Operating Agreement. The arbitration proceeding will be conducted in San Diego, California, before a single arbitrator, and administered by JAMS under the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time a demand for arbitration is made. The arbitration process is set forth in further detail in the Operating Agreement.

# THE COMPANY'S OBLIGATION TO INDEMNIFY THE MANAGER AND MANAGER'S AFFILIATES COULD RESULT IN SIGNIFICANT CHANGES THAT WOULD ADVERSELY AFFECT THE COMPANY'S PERFORMANCE

Under the Operating Agreement, the Manager and Manager's affiliates are not liable to the Company or to the Members for any act or omission except for acts of misconduct or gross negligence, and under certain circumstances, the Manager and Manager's affiliates will be entitled to indemnification from the Company for certain losses, including, without limitation, on personal guarantees of Company debt. Such indemnification obligations may be material. The indemnification obligations of the Company would be payable from the assets of the Company, including the capital contributions of the Members.

# RIGHTS TO REQUIRE MEMBERS TO PARTICIPATE IN A SALE TRANSACTION

Subject to certain limitations as set forth in the Operating Agreement, if Members holding a majority of the outstanding Units elect to consummate a sale of all of the Units or equity interests in the Company to any independent third party, the Operating Agreement obligates the other Members to consent to the proposed transaction and to take all other actions reasonably necessary or desirable to cause the consummation of such proposed transaction. Therefore, you may be required to sell your Units without consent if the owners of a majority of the Company's Units desire to sell their

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Units

# COMPANY HAS RIGHTS TO PURCHASE UNITS UNDER CERTAIN CIRCUMSTANCES

If a Member receives a bona fide written offer from a third party to purchase all or a portion of such Member's Units, the Company has a right of first refusal to purchase such Units as set forth in more detail in the Operating Agreement.

The Company shall have the right, as set forth in more detail in the Operating Agreement, to repurchase the Units of a Member upon the withdrawal, resignation, expulsion, bankruptcy, dissolution, death or occurrence of any other event which terminates the continued membership of such Member. The purchase price for such Member's Units shall be the fair-market value of such Units as determined by the Manager in Manager's good faith discretion (which means that the Manager may not be required to obtain an independent appraisal or valuation of the Units). The purchase price may be paid in full in cash or in installments as set forth in the Operating Agreement. These purchase terms are favorable to the Company.

# SIDE AGREEMENT BETWEEN BROWN AND CHEN

Brown and Chen have entered into an agreement ("Side Agreement") giving each other the option and right to purchase the other's Units ("Purchase Right") in the event of the termination of the other's membership with the Company, including the withdrawal, expulsion, bankruptcy, dissolution, or death of such person ("Dissociation Event"). The purchase price for such Units is their fair market value based on an appraisal process (if Brown or Chen, or their legal representatives, as applicable, cannot agree on a purchase price). The Operating Agreement generally gives the Manager the right to cause the Company (or an assignee), in Manager's discretion, to acquire a Member's Units with respect to a Dissociation Event at fair market value as determined in the Manager's good faith discretion. If either Brown or Chen suffered a Dissociation Event and the other exercised the Purchase Right with respect to such event, the Side Agreement would result in either Brown or Chen acquiring ownership of the other's Units, and not the Company, and possibly using a different process to determine the fair market value of the Units. If Chen acquires Brown's Units under the Side Agreement, then Chen may acquire enough Units to give her a majority of the outstanding Units, and, in such event, Chen will have sufficient votes to appoint herself the Manager of the Company, giving her substantial control over the Company's operations.

In addition to their business relationship operating IZOLA, Brown and Chen have a personal relationship. If their personal relationship ends (a "Separation"), then Brown has the right and option to purchase Chen's Units at fair market value, as agreed by Brown and Chen or, if they cannot agree, determined by an appraisal process. The Operating Agreement generally restricts transfers of Units except in certain circumstances, including transfers of Units approved by the Manager in its sole and absolute discretion. If Brown is the Manager at the time of Separation, then Brown will have the authority to approve the transfer of Units from Chen to Brown under the Side Agreement.

# MEMBERS CLAIMS ARE SUBORDINATE TO CREDITORS

In the event of a dissolution or termination of the Company, the proceeds realized from the liquidation of assets, if any, will be distributed to the Members only after the satisfaction of claims of creditors and the establishment of reserves. Accordingly, the ability of the Members to recover all or any portion of their investment under such circumstances will depend on the amount of the funds so realized and the claims to be satisfied therefrom.

# OTHER BUSINESS RISKS

The current business of the Company is the operation of an artisan bakery, limited to hot-from-the-oven small-batch croissants and wild sourdough. A business primarily focused on this concept is a relatively untried concept in the United States. The success of the Company's business will in large part be dependent upon the acceptance by the public of this concept. Failure of the concept to find acceptance among local customers would likely result in the failure of the Company. In addition, the Company operates in an industry with significant competition. The Company's business plan does not rely on intellectual property rights owned by the Company, other than with respect to the IZOLA trade name. As a result, there is little intellectual property protection of the Company's business plan, and competitors may develop competitive products that gain market acceptance. Competition could result in lost sales, pricing pressures, reduced margins or the failure of the Company to achieve or maintain market acceptance, any of which could have a material adverse effect on the Company's business, operating results and financial condition.

# COVID-19 IMPACT

The ongoing COVID-19 pandemic may impact the Company's ability to generate revenue and/or continue operations. If operations are ceased due to COVID-19 restrictions, the Company cannot guarantee that it will resume operations in the future.

At the time of this Subscription Agreement, the region and world are experiencing an ongoing pandemic caused by the COVID-19 virus. On the advice of public health officials, government authorities and regulators have in the past taken various actions to mitigate the spread of COVID-19, including requiring businesses to implement safety measures (social distancing, mask wearing), encouraging remote working, and ordering the shutdown of "non-essential" businesses. While many restrictions have been lifted, they will continue to impact business operations for the foreseeable future and new requirements could be imposed at any time. It is impossible to predict what long-term impacts the COVID-19 pandemic or similar public health emergencies may have on the Company or this investment.

# CERTAIN TAX MATTERS

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The Manager has elected that the Company be classified as a C corporation for Federal income tax purposes. As a C corporation, Company profits will be subject to double taxation (meaning that income earned by the Company is taxed at the entity level and, thereafter, remaining profits distributed to the holders of Units as dividends will be subject to income tax on the personal level). At any time, if deemed advisable by the Manager, the Manager shall have the right to cause (a) the Company to be converted from a limited liability company to a C Corporation, or (b) to merge the Company into a corporation that is per se taxed as a corporation or consolidate with another entity with the resulting entity being a corporation that is per se taxed as a corporation, in each case solely for the purposes of converting to a corporation that is per se taxed as a corporation and not to effect any change in ownership of the Company. If, at some point, the Manager elects that the Company be classified as a partnership, each Member will be subject to income tax each year on his, her or its allocable share of the income or gains (if any) of Company, even if no cash distributions are made by the Company to the Member or cash distributions made by the Company to the Member are not sufficient to pay taxes.

The foregoing list of Risk Factors is not a complete explanation of the risks involved in an investment in the Company. Investors should consult their own legal, tax and investment advisors before deciding whether to invest in the Company.

# EXHIBIT 2

# AFFILIATE TRANSACTIONS DISCLOSURE

IZOLA plans to open a second location at 3320 & 3326 Fairmount Avenue, San Diego, CA 92105 (the "New Location Property"). 3320 Fairmount LLC ("Property Owner"), which is co-owned by Brown and Chen, has acquired the New Location Property. Property Owner and the Company have entered into a Commercial Lease dated as of August 1, 2022, amended by that certain Addendum to Commercial Lease and that certain First Amendment to Commercial Lease, pursuant to which the Company has the right to lease the New Location Property for 25 years (collectively, the "Affiliate Lease"). A copy of the Affiliate Lease is included in the Offering Materials. The Affiliate Lease is available to Investors upon request. The Affiliate Lease may be amended from time to time in accordance with the provisions of the Operating Agreement related to Affiliate Transactions.

Property Owner entered into certain loans allowing Property Owner to borrow up to an aggregate principal amount of $2,005,000 to finance the acquisition of the New Location Property, the construction of certain improvements to the New Location Property and other specified costs ("New Location Financing"). The Company, Brown, and Chen are each joint and several guarantors of the New Location Financing. The Affiliate Lease is subordinate to the lien of the New Location Financing. Certain New Location Financing documents will be made available to Investors upon request.

Based on the current budget for the construction of tenant improvements on the New Location Property, the funds necessary for such construction are being funded by the proceeds of the New Location Financing and capital provided by the Property Owner. Any tenant improvement costs over the current budget shall be funded by the Company as further set forth in the Affiliate Lease. Any funding of the tenant improvements by the Company will benefit the New Location Property and, therefore, indirectly inure to the benefit of Chen and Brown personally, as co-owners of the Property Owner. Please refer to the use of funds described in the Offering Materials.

The Operating Agreement of the Company allows the Manager to receive compensation for performing management duties, in such amounts as are determined in good faith by the Manager to be reasonable under the circumstances. The Operating Agreement also permits the Company to enter into contracts, agreements, and business dealings with Members and Affiliates which contain provisions and conditions which in the aggregate are substantially no less favorable to the Company than the provisions and conditions which could be obtained from persons who are not Affiliates of Members or Manager.

The Company is currently paying to the Manager (co-founder Jeffrey Brown) compensation of $16.30 per hour. The Company is also paying compensation to Jennifer Chen (co-founder) of $16.30 per hour for her services as an executive of the Company. It is anticipated that such compensation may be adjusted from time to time (and may be changed from per hour compensation to an annual salary with benefits) based on the success of IZOLA, market conditions, compensation paid to others for similar services, and other factors, as determined by Manager in his good faith discretion

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The Company has agreed to pay Jeffrey Brown (Manager and co-founder) and Jennifer Chen (executive and co-founder) performance bonuses of up to $195,000 in the aggregate. The Manager shall determine the final amount and timing of the bonus payments based on the Company's ability to pay the performance bonuses as determined by Manager, in Manager's sole good faith discretion, provided that the total of the performance bonuses both to Brown and Chen shall not exceed $195,000 in the aggregate.

This information is provided by IZOLA. Mainvest never predicts or projects performance, and has not reviewed or audited this information. For additional information, review the official Form C filing with the Securities and Exchange Commission on the EDGAR website.

This is a preview. It will become public when you start accepting investment.

Investor Discussion

This discussion is exclusively available to the business owners and investors.

I'd love for this business to...

My favorite part about this is...

Please tell me more about...

Cheryl D. San Diego, CA about 1 month ago

Jeffrey, Jenny and the IZOLA team live their values and that is why we are investing in them!

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Robert P. Laguna Beach, CA about 1 month ago

Amazing bakery!

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Susan V. Santee, CA about 1 month ago

I invested because my family gobbled all the baked goods from izola this Christmas

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Sriram B. San Diego, CA about 1 month ago

I invested because I love the sourdough, croissants and the community atmosphere.

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Alexandra M. San Diego, CA about 1 month ago

I invested because IZOLA is everything I support. They are about equal pay and rights. I'm excited to see IZOLA become a household name.

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Chao T. about 1 month ago

Unfortunately, I won't be able to invest this round because I didn't have enough time to get pre-clearance from my employer. But I'm looking forward to the next round (which hopefully will give me an earlier notification).

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Natalie E. San Diego, CA about 1 month ago

It was placed on my heart to invest in Izola. I've been considering it for a month and cannot stop thinking about it today. I really believe in this bakery/concept! I have a good feeling about Izola's future.

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Daniel T. Sunnyvale, CA about 1 month ago

I supported this to play a small part in the amazing story of Izola, the most incredible bakery I've ever had the pleasure of visiting and enjoying croissants and bread from.

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Douglas C. Bryan, TX about 1 month ago

I've had your bread, and I've had your pastries, and I think you can do great things with the right funding and the right team in place to help your business grow. I'd like to be a part of that.

https://mainvest.com/b/izola-san-diego

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Dan C. Cypress, CA about 1 month ago

I invested because I love their crossisants and mission statement! I feel very welcomed everytime I visit as a customer. Izola has a great team in place already!

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Ethan S. Corona del Mar, CA about 1 month ago

I invested because I love Izola's products and I believe in the vision. I'm excited to see where they go and I hope the best to them.

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Jeffrey B. San Diego, CA about 1 month ago IZOLA Entrepreneur

Thank you Ethan! We appreciate your excitement and faith in us as we work towards IZOLA'S future. We have teams visiting from around the world to help us to increase our production and the quality of our croissants and sourdough. All while taking action on our mission. IZOLA was just certified as a living wage employer! Yay! You and the other people who invested have helped make it possible. Thank you! Jeffrey

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Kevin Y. San Diego, CA about 1 month ago

I am excited to be an investor in such a wonderful business run by excellent people. How will the offerings in Tranche 3 differ from those in Tranche 2?

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Denise C. Lemon Grove, CA about 1 month ago

Cheers to ethical entrepreneurial quests.

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Richard S. San Diego, CA about 1 month ago

Proud to support my neighbors and friends.

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Michael D. San Diego, CA about 1 month ago

We invested because we love Izola's products and business plan and are excited to help be a part of the growth and expansion of a local small business that we believe in.

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Audra H. Escondido, CA about 1 month ago

This is the first such investment I have ever made. I invested because I love Izola's products and I believe in their philosophy. I want them to succeed and grow.

Susana F. Imperial, CA about 1 month ago

I invested because we love the bread, the community the wholeness.

Leslie W. San Diego, CA about 1 month ago

I invested because I love pastries and small businesses

Jenny T. about 1 month ago

Hi Jeffrey, Can you explain what the benefits to "members" would be? I realize there may be eventual profit-sharing or increase in price of units, but is that it?

Joanna W. San Diego, CA about 1 month ago

Delicious bread and wonderful atmosphere at the bakery. I want to support this type of businesses in my city!

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Leslie-Anne E. New Harmony, IN about 1 month ago

I invested because I believe in the mission of Izola and the impact they're having on each individual who steps foot in their space. They are experience creators who care deeply for their craft - it's something you can feel. As an entrepreneur, I'm thrilled to support Izola & can't wait to make a cross-country visit to see the new space. Cheers!

Emmanuela N. San Diego, CA about 1 month ago

When I first entered Izola and taste the croissants I immediately tasted the passion and the drive of the owners and team. The details of the cafe experience and the community music was also a unique touch. Hope to have more community driven cafes like izola around the neighbourhood. Thank you for all your hard work, the community is rooting for you!

Jeffrey B. San Diego, CA about 1 month ago IZOLA Entrepreneur

Hi Emmanuela, Thanks so much for your confidence in us. Yes we strive to combine passion, with teachable process which allows us to hire team members for great personal qualities like kindness, curiosity, integrity, work ethic and self awareness. Happy team = Happy space. Thank you for the support! Jeffrey

Tracy G. Solana Beach, CA about 1 month ago

So excited to support your growing business and philosophy!

Jeffrey B. San Diego, CA about 1 month ago IZOLA Entrepreneur

Hi Tracy! We so appreciate you joining us on this journey. It's exciting! It's challenging! It's hard and sometimes a bit scary. But it makes it so much more rewarding to be part of a team of guests, owners and bakers. Onward!

anne d. Chula Vista, CA about 1 month ago

I love the care and perfection they put into their products. Worth every penny

Kenneth and Marilyn M. La Mesa, CA about 2 months ago

We are investing in Izola to support the vision of a better future of living life to the fullest with the « Joie de Vivre » !

Kevin L. San Diego, CA about 2 months ago

I supported this to help a wonderful bakery share their breads with more people.

John S. Chula Vista, CA about 2 months ago

My wife and I think very highly of Jeffrey and his team. They've fully demonstrated that they are a spectacularly successful bakery, and also have a bold vision for their growth. Wishing Izola all the best!

Bradford F. San Diego, CA about 2 months ago

IZOLA FEELS GOOD!!

Jeffrey B. San Diego, CA about 1 month ago IZOLA Entrepreneur

Hi Bradford! You've been cheering us on since the beginning Bradford, IZOLA OG! We appreciate you and look forward to more warm bread and conversation. Best, Jeffrey

Alek W. Garner, NC about 2 months ago

I was visiting San Diego for work and a colleague of mine said "If nothing else, try Izola" when giving me recommendations for local eateries. Having spent some time in Paris and other historically bake-famous countries, I can without a doubt say these are hands down the best croissants I have ever tasted. But Izola's experience doesn't stop there. When I went in person, the buying process, the environment, and the customer satisfaction had clearly been crafted with just as much dedication and passion. Izola is baking up something big, and I'm glad to be onboard.

Wayhow C. Irvine, CA about 2 months ago

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I invested because I like hot bread to serve customers. This business model has chance to be success.

Brandice M. San Diego, CA about 2 months ago

It has been a long-standing dream of mine to open a bakery. Life may have had other plans for me, but IZOLA and its founders embody the same passion and vision I've always dreamt of. I invested because I believe in the future of IZOLA!

Angela K. San Diego, CA about 2 months ago

I invested because I believe in the vision Jeffery and Jenny have set out for their business. Their model intentionally creates careers, keeps the integrity of their product, they are striving to create community 1 croissant and sourdough at a time. I am very excited to see where this goes.

Rupamathi J. Cambridge, MA about 2 months ago

I invested because I genuinely believe in your vision. Being a baking aficionado myself, I couldn't have found a better place to invest.

Joyce T. San Diego, CA about 2 months ago

Good luck!!

Elizabeth M. Worcester, MA about 2 months ago

I've been following you both since your inception when I lived in SD during the pandemic - haven't yet gotten you on the podcast but hopefully soon we'll have you on entrepreneurs IRL podcast to share your story. For now - keep rising! Incredible work and I'm happy to be a small part of what you are doing. -E

Zoraida A. San Diego, CA about 2 months ago

I wish I have more to invest. I am inspired with the team's passion! I LOVE IZOLA's BREADS! The quality is out of this world! One day, IZOLA will be a San Diego destination. And soon enough, you will be everywhere! Sending positive energy and prayers to your success! :)

Jeffrey B. San Diego, CA about 1 month ago IZOLA Entrepreneur

Hi Zoraida, Thank you so much for going on this journey with us. We appreciate your stoke for IZOLA Sourdough. It's made with a few great ingredients and a lot of love. It's looking particularly tasty today (Sun). Hope to see ya at the bakeshop. Cheers! Jeffrey

joaquin b. Chula Vista, CA about 2 months ago

I invested because when I went to buy bread for the first time I saw the community and the following it had. I had a feeling that I should invest and so I did. I would not invest without trying the goods and as I took my first bite I knew what I am investing in is in Flour Pure Gold.

Jeffrey B. San Diego, CA about 1 month ago IZOLA Entrepreneur

Hi Joaquin! We appreciate your faith in us, especially on the challenging days it stokes our passion for quality, hospitality and service. Cheers, Jeffrey Cheers, Jeffrey

Abram M. about 2 months ago

I'm very interested in this offering because it's the first I've seen on Mainvest that is an equity offering. I believe I understand the offering structure, but I'm interested in what the eventual exit strategy may be. Specifically, I have four questions: 1) Do you at any time in the future plan on paying dividends to shareholders? 2) Do you at any time in the future plan on pursuing an IPO? If so, will the company be restructured into a C-corp or another corporate structure more typically utilized in those purposes? 3) Do you at any time in the future plan on being acquired? 4) If you do not plan on paying dividends, pursuing an IPO, or being acquired, is there some other exist strategy you've considered pursuing? Thank you!

Jeffrey B. San Diego, CA about 2 months ago IZOLA Entrepreneur

Hi Abram, Thank you for your interest and asking these important questions. I'd like to preface this discussion by saying that it is impossible to accurately predict the future. That being said: 1) Yes we like the idea dividends (profit sharing), though given our growth plans and their capital and operational costs we imagine that significant profit and profit sharing will be a quite a ways into the future (we are looking for patient capital). Statistically most small businesses fail, so we may never become profitable. 2) IPO - All our options are on the table, we may remain privately held, we may sell all or part of IZOLA to a great partner, we may IPO, IZOLA may fail and dissolve. And at that time, we will structure the company in the most appropriate manner. 3) Acquired? Possibly, I touched on it a bit in the previous question. To expand on that, we would only sell to a great partner that was fully committed to IZOLA's mission. We want IZOLA to be a 100 year company. 4) Dividends, IPO, Acquisition: All 3 of these are

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viable strategies in our tool kit as we navigate IZOLA towards our mission of changing the way America experiences croissants and sourdough bread. And doing that in a justice driven way. We believe in paying a living wage, minimizing our impact on the environment, even when it costs more, making opportunity for advancement and equitable compensation available to every team member regardless of where they come from, who they love, what they look like or their gender. One thing I am sure of, we will continue to innovate rapidly, fail often and create a community that is welcoming for our guests and team members. Warmest regards, Jeffrey

Abram M. about 2 months ago

Jeffrey, appreciate this in depth answer!

Kaiya R. San Diego, CA about 2 months ago

I invested because I believe in the power of good baked goods!!

Jeffrey B. San Diego, CA about 2 months ago IZOLA Entrepreneur

Hi Kaiya! We totally agree! Baked goods, fellowship, justice. Yum, they make life so much more satisfying. Thank you so much for your faith in the IZOLA team. Cheers, Jeffrey

I-hon C. San Diego, CA 2 months ago

I love the vision! Love the sour dough, crossiants, everything!!

Jeffrey B. San Diego, CA 2 months ago IZOLA Entrepreneur

Hi I-hon! Thank you so much for believing in us. Our vision, great food, community and justice, is make up of just a few simple ideas, and it takes a lot of resources to build, maintain and expand it. Thank you so much for your belief in the IZOLA community. Cheers! Jeffrey

Brittany C. San Diego, CA 2 months ago

I invested because I believe in the business and the people leading it! Love the investment back to the people and community as well!

Jeffrey B. San Diego, CA 2 months ago IZOLA Entrepreneur

Hi Brittany! We are deeply grateful for your support. We envision a more just and equitable future and your support enables and emboldens that mission. See ya at the bakeshop! Jeffrey

Carl O. Medford, NJ 2 months ago

I invested because this is a unique opportunity to purchase equity interest in a growing business. Izola is generating revenue & has been repaying their RSN, giving me confidence in the Founders

Jeffrey B. San Diego, CA 2 months ago IZOLA Entrepreneur

Thank you for your faith in us Carl! Any small business is very risky, but your investment helps us lower the risk and accelerate IZOLA's future.

Toluwalase (Lasé) A. San Diego, CA 2 months ago

I invested because I believe in your mission and vision. Plus your food is delicious.

Jeffrey B. San Diego, CA 2 months ago IZOLA Entrepreneur

Thanks so much Lasé! We believe and take action on our justice based mission. Environmental, Gender, Sexual Orientation, Racial, Economic, and your investment helps us focus on a secure long term future. Cheers, Jeffrey

Marisa M. San Diego, CA 2 months ago

love your croissant

Jeffrey B. San Diego, CA 2 months ago IZOLA Entrepreneur

Hi Marisa! Thank you for loving our food. I'll share your feedback with the team. They work sooooo hard. We are continually testing, and using the results to improve. Exciting changes on the horizon! Cheers, Jeffrey

https://mainvest.com/b/izola-san-diego

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David A. Paradise Valley, AZ 2 months ago

Can you update me on my early round

Jeffrey B. San Diego, CA 2 months ago IZOLA Entrepreneur

Hi David, thank you for investing in IZOLA's future. Things are going very well, please visit https://mainvest.com/businesses/izola/dashboard/investors/updates to see all our updates. If you have specific not covered there, feel free to email me at jb@izolabakery.com Thanks!

Robert G. La Mesa, CA 2 months ago

Because I love to bake.

Jeffrey B. San Diego, CA 2 months ago IZOLA Entrepreneur

Hi Robert! Baking is a magical task. It builds community, fills happy tummies and connects us to centuries of tradition. Thank you for baking, and supporting IZOLA's future. Cheers, Jeffrey

Stephanie R. San Diego, CA 2 months ago

I invested because Izola has an amazing group of people, who no matter what is going on, try to be pleasant and give the consumer the best service possible.

Jeffrey B. San Diego, CA 2 months ago IZOLA Entrepreneur

Thank you so much for the generous feedback. Kindness is one of the 5 key traits we look for in building our team. Also curiosity, work ethic, optimism and self awareness. We strive for a community that is healthy inside and out. Cheers, Jeffrey

Bradford F. San Diego, CA 3 months ago

I supported this to

Bradford F. San Diego, CA 3 months ago

I supported this to

Jeffrey B. San Diego, CA 3 months ago IZOLA Entrepreneur

Hi Bradford, thank you so much for accelerating IZOLA's development and your faith in us. Cheers! Jeffrey

Veronica H. San Diego, CA 3 months ago

I'm excited for you and all who get to enjoy the deliciousness bonne chance

Jeffrey B. San Diego, CA 3 months ago IZOLA Entrepreneur

Hi Veronica! Thank you so much for your support of our food, our community and our mission driven business model. Cheers, Jeffrey

JORDAN P. San Diego, CA 3 months ago

IZOLA has the recipe for success and I believe this company will reach amazing heights!

Ester F. San Diego, CA 3 months ago

I supported this to help community based small businesses which in turn employ local residents and give strength to our community. More power to us!

Yeongching L. Ann Arbor, MI 3 months ago

Provide the best food to everyone.

https://mainvest.com/b/izola-san-diego

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Lucas K. San Diego, CA 4 months ago

Hope you will continue to expand and spread the quality of products you guys have been conducting until now, hope to meet you again soon in San Diego !! Power ! Keep pushing !

Janet C. San Diego, CA 4 months ago

I supported this to I love the way they communicate with their community and customers. Very kind.

Jason H. 4 months ago

Hello. I want to make sure I understand the details of this offering correctly. If fully funded, there will be 14,664,050 units outstanding after this offering. Priced at $2/unit, that values the company at slightly less than $30M. Current revenue expectations for 2022 are roughly $1M.

Suzanna L. San Diego, CA 2 months ago

The profile states that the unit price was determined arbitrarily and is unrelated to valuation

John C. about 1 month ago

I think you're correct here. The July 2022 raise priced at $1 for a total valuation of $12M. Now it's $2 for 14.6M shares, so that's $29.3M

Bernadette M. Rancho Santa Fe, CA 4 months ago

I invested because of the quality of the product they sell. I love it, so are other thousands of people. Expansion will allow Izola to reach to more people at any day of the week.

Patricia H. Del Mar, CA 4 months ago

It's the bread!

Christina L. Encinitas, CA 4 months ago

I have visited Izola twice and I have never felt such a sense of community and diversity and breaking bread 🧨 and eating delicious croissants 🌳 while listening to amazing local musicians. It's an easy sale to want to invest and watch this business expand and grow locally or on an even larger scale.

Julie M. San Diego, CA 4 months ago

I was only able to try your bakery once so far because it is so popular! I am so excited to be a part of your expansion! I am so excited to see how huge you get! Congratulations on this new big adventure!

Julie T. San Diego, CA 4 months ago

I am excited to share this adventure with you.

Erwin M. 4 months ago

I've read over the offering but I didn't see anything in there that talks about a projected ROI. Since there aren't different class shares, will there be a yearly equity payout and/or what year can an investor expect to exit the deal?

Suzanna L. San Diego, CA 4 months ago

The summary of terms sections does not seem to have this information, such as the multiplier.

Nicole N. Phoenix, AZ 4 months ago

And no response makes me wonder why they won't respond and address? I'd like to clarify before I commit investment

Suzanna L. San Diego, CA 2 months ago

If anyone knows the rate of return on this investment, please do share. I've read the documents but it's very possible that I glossed over the pertinent sections!

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Daniel T. Bloomfield Hills, MI 2 months ago

I'm guessing there isn't an ROI, since they haven't responded yet or provided any info. A $1,000 minimum investment with no clear info, is too much to rush. I just invested in Eastern Market Brewing Company and they provided info on their listing. I live close to EMBC in Michigan and they run a great business and are trustworthy. If a company is vague, I wouldn't trust investing in them.

Olga B. San Diego, CA 5 months ago

Love their croissants but even more than the croissants, I love the passion for the product and the brand that their shoppers exude. My hope is that IZOLA can maintain this passion for their brand among their shoppers as they grow.

Gokhan O. San Diego, CA 5 months ago

Hi Izola, I invested because we love all the products and growth since you started it up from scratch. We would like to get more updates and shares for future. plans that we can support.

Jeffrey B. San Diego, CA 4 months ago IZOLA Entrepreneur

Hi Gokhan, We appreciate you and your enthusiasm for IZOLA and it's mission driven values. We'll definitely reach out as opportunities arise and also to update everyone on our progress with the new IZOLA Main and other important milestones. See ya at the bakeshop! Cheers, Jeffrey

David S. San Diego, CA 5 months ago

This investment shows our confidence in Izola, from the first bite of a croissant lowered down to a street fair, to subsequent visits, to Jeffrey giving me, my wife, and our daughter an amazing and thorough tour of the kitchen and prep facilities. Go get 'em...!!!

Jeffrey B. San Diego, CA 5 months ago IZOLA Entrepreneur

Hi David! Thank you so much for your faith in IZOLA, our mission and backing it up with financial support to help us grow. I have to say we do it for the people, we love the community from the very first croissants that we lowered out the third-floor window during Covid to now when we see old friends and new friends walk in that door in and relax just a little bit. We want to make a space that safe, inclusive, and fun. See you at the bake shop! Thank you, Jeffrey & the IZOLA Team.

Dale S. Rancho Santa Fe, CA 5 months ago

My congrats to you for following through on your instincts. It certainly takes strong passion to bring an idea into existance which you have demonstrated. Keep growing the business please and having fun. San Diego is a great town and will respond very favorable. Now it's your turn to contribute to my nomadic adventures. Work hard I need the money too!!

Jeffrey B. San Diego, CA 4 months ago IZOLA Entrepreneur

Hi Dale, thanks so much for your support. Enjoy the nomad life! Jenny, I and the team are giving it everything we've got. Send us a postcard every now and then. We'll live our travel life vicariously through you. Cheers, Jeffrey + Jenny

April S. San Diego, CA 5 months ago

So excited to be a part of this amazing enterprise!

Jeffrey B. San Diego, CA 4 months ago IZOLA Entrepreneur

Hi April, Thank you so much for believing in us. It's been very rewarding to bring joy to our community in croissant size packages. Cheers to the future! Jeffrey

Hung P. San Diego, CA 5 months ago

I invested because the business model makes sense and I am rooting for its success.

Jeffrey B. San Diego, CA 4 months ago IZOLA Entrepreneur

Hi Hung! Thanks so much for your support of IZOLA. We appreciate it. This "magical" formula we've come up with good food, warm hospitality, strong service has evolved organically. And it's really a sum of experiences that Jenny and I crave. Or putting it another way, we're solving a problem for ourselves. Where can we get bread hot from oven, in a nice space with friendly people. We appreciate you! Jenny and Jeffrey

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Jeremy A. San Diego, CA 5 months ago

I invested because I believe in the izola future. I'd love to see izola all over San Diego! Cheers to the izola family!

Jeffrey B. San Diego, CA 5 months ago IZOLA Entrepreneur

Hey Jeremy! Thank you so much for your faith in us. Your investment will help us build out IZOLA Main in City Heights and activate a blighted corner bring 25 living wage jobs to an underserved neighborhood. AND give us the ability to increase our croissant production by 20x. Wow! that's a lot of croissants and we'll be able to open hot-from-the-oven bake shops all over San Diego county and maybe up into OC. Again, thank you so much! Jeffrey

Ryan L. Sanford, NC 5 months ago

I invested because dem croissants are insane

Jeffrey B. San Diego, CA 5 months ago IZOLA Entrepreneur

hahaha. Perfectly stated! Thanks so much for the support Ryan. We appreciate you. Cheers, Jeffrey

Elly S. San Diego, CA 5 months ago

I invested because I believe in your product and your vision. I am excited to become a part of your journey in realizing both!

Jeffrey B. San Diego, CA 5 months ago IZOLA Entrepreneur

Hi Elly! Thank you, Thank you, Thank you for the positive message and support. It fuels our passion to do hard things. Your investment helps bring those smiles to San Diego. Cheers, Jeffrey

Jenna E. San Diego, CA 5 months ago

My husband and I live in East Village, came across IZOLA, and fell instantly in love! We adore everything on the menu, and each baked good truly is a work of art. This bakery is incredible and a staple of East Village. We are proud to invest in a local business in our neighborhood doing something extraordinary.

Jeffrey B. San Diego, CA 5 months ago IZOLA Entrepreneur

Hi Jenna! Thank you so much for welcoming IZOLA into East Village. We love the community and it will always be IZOLA #1. We appreciate your support and faith in us. Cheers, Jeffrey + the IZOLA Team.

Clinton L. 5 months ago

Hi Jeffrey I have invested in the business at the very beginning of the first round of equity investment, but since then I haven't heard of anything. I thought this would be a dividend equity, but it seems like right now you're asking for angel investors as I also read it in one of your comments below saying that there is no exit policy designed so far. Can you let me know what is the benefit of becoming an equity holder ?

Jeffrey B. San Diego, CA 5 months ago IZOLA Entrepreneur

Hi Clinton, thanks so much for your support and the great question. Two benefits: First you accelerate the growth of IZOLA and it's intertwined mission of justice. Environmental, Racial, Economic, Sexual Orientation & Gender. 2nd If IZOLA is successful, you will have a front row seat to benefit financially if and when we choose invest less in our expansion and pay a dividend, or other scenarios. For example if we choose to go public or sell a portion or all of the company. We're looking a building long term customers and value and improving the communities we operate in. Cheers, Jeffrey + the IZOLA team.

David D. 7 months ago

I wish I could find the passion for something, anything, that you two have for IZOLA and its products. You can taste, smell, and feel it in your bakery and the sourdough and croissants themselves. Just hearing you describe the architecture of a croissant; like you were describing a Frank Lloyd Wright home was moving!

Jeffrey B. San Diego, CA 7 months ago IZOLA Entrepreneur

Thank you so much David! We love to see people enjoying themselves and connecting with friends and family. Thank you for your support! Nice to https://mainvest.com/frizola-san-diego

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Invest in IZOLA | Croissants | Wild Soundough in San Diego, CA

meet you! Jeffrey

Yara F. El Cajon, CA 8 months ago

Hi Jeffrey and Team - I am a certified urban planner and environmental specialist who has helped process many projects through the City of San Diego over the last 20+ years. If you have any questions or need recommendations on consultants for the process you are going through, please let me know. I think you have my email address, but let me know if you have questions!

Jeffrey B. San Diego, CA 8 months ago IZOLA Entrepreneur

Hi Yara, Thank you so much! We appreciate your willingness to help and we'll be sure to reach out as needs arise. We're almost ready to finalize the purchase. Fingers crossed! Cheers! Jeffrey

Yara F. El Cajon, CA 8 months ago

Awesome news!

Denise B. La Mesa, CA 8 months ago

Just signed up with Mainvest, but they don't seem to offer the opportunity to invest in Izola right now. Is that coming through Main vest, or do I need to wait for an SEC - type offering? I am sold on your mission and goals and, as a home baker, am excited to try the bread and croissants! Denise Botticelli

Marcus D. 8 months ago

Like you really want to invest in it I got the fast room it can go in you investing tho

Jeffrey B. San Diego, CA 8 months ago IZOLA Entrepreneur

Hi Denise, Thank you so much for your interest in IZOLA. Our campaign is on a pause while we satisfy SEC requirements to increase our investment amount. Once we take care of that, we will re-open our investment and we'll be sure to post it here in the discussion and via our investors email list. Cheers, Jeffrey

Mark D. San Diego, CA 7 months ago

Will the offering be the same terms as last round? I would like to see original investors rewarded more than newer ones.

Yihan H. San Diego, CA 8 months ago

Hi Jeffery, I visited the shop for the first time today and I love the idea of how you turned a photo studio into a bakery shop. I noticed that you have a background in photojournalism, and I was wondering if you are interested in hosting any community art events. The big white wall and the huge open space in the studio seem like a good setup for a mini photography exhibit, for instance. I was just thinking events like that can keep the community stronger and more engaged, which is aligned with one of your focuses. Looking forward to the second round of equity offering :)

Georgina T. San Diego, CA 8 months ago

Love the croissants and ambiance at Izola! Kudos to your team for maintaining quality. Do you know when the next round of investment opportunities will be available?

Jeffrey B. San Diego, CA 8 months ago IZOLA Entrepreneur

Thank you Georgina! We're working on fulfilling the SEC requirements to expand our Equity Offering. We expect the timeline for this to be about a month. Cheers, Jeffrey.

Maureen M. San Diego, CA 9 months ago

I invested because I believe in this business, the business owners and the products they offer.

Jeffrey B. San Diego, CA 8 months ago IZOLA Entrepreneur

Thank you so much for accelerating IZOLA: FUTURE and your faith in us!

Hong H. San Diego, CA 9 months ago

https://mainvest.com/bizola-san-diego

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Izola's chocolate almond croissant is LIFE-CHANGING! I believe in all the amazing baked goods that come from the Izola team. More importantly, I'm investing because I was born and raised in City Heights, and still live there. I believe that there's a lot of potential for Izola's new space to create new opportunities and engage with the community.

Jeffrey B. San Diego, CA 8 months ago IZOLA Entrepreneur

Hi Hong! We're super excited about joining the City Heights community. We'll create 20+ purpose filled, living wage jobs and activate a corner that has been stagnant for decades and creating a vibrant community asset. And of course we're looking forward to sharing our croissnts and sourdough bread with the neighborhood, all hot from the oven. Thank you for your faith in the IZOLA team. -Jeffrey

Louie N. 9 months ago

Izola team, curious if the staff will be provided a pathway to ownership. Also, what's the anticipated exit for equity investors?

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Louie, I'm so glad you asked. Heck yes! Jenny and I have earmarked a chunk of equity for the team. And the exit will be the same as for the equity investors, it may never become liquid and we do not have an anticipated exit at present. One thing is for sure, we are looking for patient capital. It take at least a decade to build a real business. As an investment professional, you know the odds are against us. Our community is strong, and we are scrappy, resourceful, and passionate. Cheers! Jeffrey

Richard S. San Diego, CA 9 months ago

IZOLA has been my neighbor for two years now and I've eaten an embarrassing amount of Tahitian Vanilla Knots... so this seemed like an obvious move. IZOLA rocks!

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hey Rich! Great to see you at the bakeshop yesterday. We've been humbled and amazed of the support of IZOLA by you, and the entire IZOLA community. We've raised over $400,000 is just a few days from customers and employees. From way back in the beginning, some folks told us we couldn't or shouldn't. And now the community has spoken. Warm bread and butter & fellowship for all. I could not be more excited. -Jeffrey

Daniel S. Escondido, CA 9 months ago

Croissants rock! Happy to add to the campaign!

Geraldine E. San Diego, CA 9 months ago

Never had so much umami in a croissant ever. Had to invest!

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Geraldine! Yes, that d'Isigny AOP butter from France is amazing. Grassy and elemental, it connects our organic flour from Utah, free range eggs and organic milk in a magical way. And the Maldon Sea Salt, made made by the same family in Essex since 1882, intensifies all the flavors. We appreciate you! -Jeffrey

Mohammed K. Novi, MI 9 months ago

Hi, I got question. According to the SEC, the offering is $12 million, may I ask what is the ROI in 2021 and 2022 so far and how did you reach to the existing valuation? Thank you

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Mohammed! Thanks so much for asking. The valuation is arbitrary. Jenny and I look at the processes, technology and team that we have shepherded, the community support, the past growth. And then we look forward, and guess. No one can predict future performance of a company. And if they tell you they can, they are full of b.s. Growth is expensive and over the past two years we are maintaining triple digit annual growth. Our mission is to change the way American thinks about and experience croissants and sourdough. We expect to reinvest any profits back into IZOLA for the foreseeable future. The ROI, if any, will come if the value of the units (shares) increases and if they ever become liquid. And the odds are frankly against us, 8 of 10 small businesses do not make it. I believe in the power of flour, butter, community and justice. - Jeffrey

Sarah L. San Diego, CA 9 months ago

https://mainvest.com/b/izola-san-diego

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Croissants for life!

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Sarah! Yes, I totally agree. A funny story, up until 2020, i was a bread guy. I loved all kinds of bread...Croissants? I didn't think much about them at all. As we were launching IZOLA, just making sourdough, Jenny asked me to make a batch of croissants. And I thought to myself, I don't really care for croissants, but I'll make em for my love. And in my first batches, which were mediocre at best, I was smitten. The architectural foundations of the laminated dough and rolled structure, the interplay of temperature and texture, the gossamer texture of the proofed croissant...and the life changing (for me at least) experience of eating a croissant hot from the oven. And fast forward 2 years, I have found my life's work. To share this experience widely. Thank you for your support. -Jeffrey

Diane L. San Diego, CA 9 months ago

I am investing in IZOLA as I support the dynamic founders Jeff and Jenny, the delicious products, my community and my new croissant addiction! Lex

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Diane, thank you for the vote of confidence in Jenny, I and the whole IZOLA team. Croissant addiction?...oh yea, we are right there with you! We appreciate you!

Xinning S. San Diego, CA 9 months ago

Amazing croissant and sour dough! Great customer service and store vibe.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Thank you Xinning! Your IZOLA Experience is precious to us. We think of your experience as table with 3 legs: Hospitality or how you feel when you are at IZOLA is one leg. The food quality (is it amazing) is another leg and the technical aspects of the service (e.g. was the order ready on time, properly packed, hot from the oven) another leg. For you to experience IZOLA in it's fullest form (and the table to stand up), all 3 of these legs must be strong. And when we make a mistake (and we make plenty), and you are not delighted. We cheerfully offer the IZOLA Almighty Guarantee...a full refund.

Barbara T. Las Vegas, NV 9 months ago

I invested because I believe in Izola people and mission. And damn those are good croissants and sourdough.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Barbara, you've been supporting us from the very beginning. From great advice, to a shoulder to cry on when it all got to be too much, to rolling up your sleeves and washing dishes...a lot of dishes. Wow, you are a friend and mentor to the IZOLA family. Thank you so much!

Mark D. San Diego, CA 9 months ago

Ate a croissant, invested immediately

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hahahaha! Thank you Mark for your levity and your support. Nothing like a good belly laugh...and full of croissant! Cheers, Jeffrey

Shrey P. San Diego, CA 9 months ago

Good luck Izola. We believe in you. - Shrey & Rizzy

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Shrey! Rizzy! You guys are amazing. Thank you so much for all your support, from Rizzy's great profile of Jenny to your investment that amplifies our mission. Wow!...just wow!

Anna N. Chula Vista, CA 9 months ago

I am very excited about this. I believe you should invest in products you believe in. The bread in Izola is the best, and the people working there are super friendly. There is a relax atmosphere at Izola that I really enjoy.

https://mainvest.com/b/izola-san-diego

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Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Anna, we appreciate your excitement and value your voice in our community conversation. We believe in creating spaces that are vibrant and welcoming for people from all walks of life. IZOLA is justice driven: Environmental, Gender, Orientation, Race, Economic. Thank you for amplifying that work. -Jeffrey

Stevan N. 9 months ago

Hey there I would like to invest and reached out to you on email and am looking forward to doing a larger amount then you have listed let me know when it's a good time to talk I can be in the area anytime. We have spoken before a couple times and you gave me a tour of the kitchen.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Stevan, thank you for your interest in supporting IZOLA. We love giving kitchen tours, i believe it helps people connect more deeply with food they are eating and the people who make it. We're planning our next location and we'll be bringing the ovens right out front, so you can sit at a diner style counter, watch us bake and chat with the bakers as they do their work. Fun, fun, fun!

Nina L. 9 months ago

Just tried you guys out for the first time and it was amazing! Can't wait to visit the space. Just FYI your deck says $100 minimum investment but the site says $1,000.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Nina, I'm so glad you enjoyed your first visit. Welcome to the IZOLA family. I look forward to seeing you around the bakeshop soon. And thanks for the heads up on the deck, updated! Cheers, Jeffrey

Sepehr A. San Diego, CA 9 months ago

Just invested and very excited to see you guys further succeed.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Thank you Sepehr! We're looking forward to our expansion, and deepening our connection with City Heights neighborhood. We'll bring 20+ purpose filled, living wage jobs to the community. And because every process at IZOLA is document and teachable we can hire people from diverse backgrounds with the traits we admire: kindness, integrity, curiosity, and work ethic (and no baking experience), and mentor them to be productive members of the team in just a few days. (No grumpy chefs need apply please.) Cheers! Jeffrey

Maya R. San Diego, CA 9 months ago

Excited to see you grow!

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Maya! Jenny and I appreciate your faith in us. Your capital helps to de risk and accelerate our mission to change the way America thinks about croissants and sourdough and supports our justice driven actions. A few stats about IZOLA Leaders: 25% of our leaders identify as LGBTQIA+, 50% Women, 62.5% BIPOC. And we're not done yet! - Jeffrey

Denaz S. Little Rock, AR 9 months ago

What is BIPOC?

Frank D. San Diego, CA 9 months ago

Increased my investment as I visited your downtown facility for the first time today. I like your philosophy and I am impressed with your products.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Thank you Frank! We try to take the simple approach. From using the best tasting ingredients to serving our food hot from the oven.

Ian L. Carson City, NV 9 months ago

https://mainvest.com/bizola-san-diego

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Jennifer and Jeffrey, Danielle and I were so pleased to stumble upon Izola as we were spending time in San Diego in our RV. On our first visit last December, we were instantly greeted by the most amazing staff. After striking up a conversation with Jeffrey, he invited us behind the scenes to see first hand the magic behind the croissants and sourdough operations. From that day forward we were hooked, and Izola was easily our most frequent stop over our next 6 months in San Diego. Even though we're not local, as full-time RV'ers, we pride ourselves on finding the best of each community we visit and supporting them where we can. We've been blessed to meet so many great people on our ride, and we truly appreciate all you do to support your local community. We're so excited to see what the future holds for Izola, and we'll be back in your neighborhood soon to say hello and eat all the croissants! Best of luck!

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Ian, We appreciate you and Danielle's kind and adventurous spirit. Enjoy your travels, you always have a home at IZOLA. - Jeffrey

Frank D. San Diego, CA 9 months ago

To invest in small business is good for the economy.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

So true Frank, IZOLA has created a mix of 18 full and part jobs. Living wage. Filled with purpose. Justice driven

Polly D. San Diego, CA 9 months ago

Our family invests in IZOLA because we believe in community, and IZOLA is a positive contributor to making San Diego better!

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Polly, we love your voices in the IZOLA community. And a big thank you to you, Jaclyn, Dane, Dominic for accelerating IZOLA's future and amplifying our justice driven mission. -Jeffrey

Christina N. El Cajon, CA 9 months ago

My favorite part about this is having the opportunity to invest in such a buttery, delicious product, made with heart and passion!

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

So many great friendships have been kindled over bread, butter and coffee. Thank you!

Lisa B. San Diego, CA 9 months ago

We believe in Izola and your ability to connect people through the power of flour, yeast, butter and love. Thank you for doing what you are doing. It just takes a few committed people to make the change.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Hi Sis, thank you so much for kicking off our Equity Offering yesterday. Inspiring me to stretch for my dreams, lifting me when I stumble, celebrating my success. Thank you!

Robert E. San Diego, CA 9 months ago

I invested because Izola makes the most phenomenal Croissants. Jeff is driven to overcome all barriers to success.

Jeffrey B. San Diego, CA 9 months ago IZOLA Entrepreneur

Thanks Bobby! IZOLA is a team of 18 who show up every day with their whole hearts. I am humbled.

Victoria P. San Diego, CA 9 months ago

So proud to be part of this fantastic team of investors. I've been watching IZOLA grow since the early days of Covid when it became one of my favorite happy places. It has become so much more because of the heart and humanity with which it has been nurtured by Jeffrey, Jenny and their whole butter loving team. Mazel! Tov Y'all!

Diane B. San Diego, CA 9 months ago

https://mainvest.com/bizola-san-diego

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I love Jeffrey and all that he stands for. He is working to move this world forward, one loaf of bread at a time.

Stella Y. San Diego, CA 10 months ago

I invest because I believe in the community you are going to create. Also, your carbs are good!

Jeffrey B. San Diego, CA 10 months ago IZOLA Entrepreneur

haha, so true Stella! It's been amazing to watch the community grow. Jenny and I envision ourselves a bit like gardeners. We prepare the soil (hold the space) and the community flourishes naturally. Thank you for joining us!

Natalie C. San Diego, CA 10 months ago

So happy to be a part of this awesome/special place!!

Jeffrey B. San Diego, CA 10 months ago IZOLA Entrepreneur

Thank you so much Natalie! Jenny and I appreciate your faith in us and your excitement for IZOLA's future.

Daniel W. San Diego, CA 10 months ago

In your business plan, you list the equity shares which places your valuation at 12M. How did you calculate that valuation?

Jeffrey B. San Diego, CA 10 months ago IZOLA Entrepreneur

Hi Daniel, great question! We looked at other comparable businesses in the food space, factored in that we are growing at 300%+ annually and profitable, and added in our proprietary technology and trainable, scalable methodology, and looked at near future distribution and growth opportunity. Best, Jeffrey

Ali S. Placentia, CA 10 months ago

Is the interest on the investment paid in perpetuity or just until the original investment has been paid back?

Jeffrey B. San Diego, CA 10 months ago IZOLA Entrepreneur

Hi Ali, thank you for asking! The interest on the investment is paid until the original investment has been paid back. Please keep in mind that investing in small businesses has risk and your entire investment could be lost. Best regards, Jeffrey

Stefania R. Chula Vista, CA 10 months ago

I invested because I love supporting small local businesses, especially since they make amazing food!

Jeffrey B. San Diego, CA 10 months ago IZOLA Entrepreneur

Thank you Stefania! We're inspired and emboldened by your support for small business! Cheers, Jeffrey

Boyce P. Little Rock, AR 10 months ago

I invested because small businesses need a hand up and not a hand out in free enterprise.

Jeffrey B. San Diego, CA 10 months ago IZOLA Entrepreneur

Hi Boyce! Thank you for investing on IZOLA's future. We look forward to creating new job opportunities for San Diegans and making some great croissants and sourdough. Best! Jeffrey

Barbara T. Las Vegas, NV 10 months ago

Delighted to invest and watch Izola grow and the raise the dough!

Jeffrey B. San Diego, CA 10 months ago IZOLA Entrepreneur

Barbara, thank you for all you have done for us. You're an IZOLA hero. I appreciate your investment! It amplifies our mission of justice and helps us expand our distribution and improve our efficiency in our production. Cheers!

https://mainvest.com/bizola-san-diego

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Invest in IZOLA | Crossroads | Wild Soundough in San Diego, CA

Margaret M. Dallas, TX 11 months ago

Excited to see this grow.

Jeffrey B. San Diego, CA 10 months ago IZOLA Entrepreneur

Thank you Margaret! We appreciate your support and faith in IZOLA!

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### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM C

### UNDER THE SECURITIES ACT OF 1933

### Issuer Information

**Name of Issuer:** Tallgrass Pictures LLC

**Legal Status:** Limited Liability Company

**Jurisdiction of Incorporation/Organization:** CA

**Date of Organization:** 11-15-2004

**Physical Address:** 710 13TH ST STE 300, SAN DIEGO, CA, 92101

**Issuer Website:** https://www.izolabakery.com/

**Is there a Co-Issuer?:** No

**Intermediary Name:** MainVest, Inc.

**Intermediary CIK:** 0001746059

**Intermediary File Number:** 007-00162

### Offering Information

**Compensation to Intermediary:** MainVest will be paid Three (3) Percent of the amount of the Offering raised by "In-Network Users" of the Platform plus Nine (9) Percent of the amount of the Offering raised by all other investors.

**Financial Interest in Issuer:** MainVest, Inc. owns no interest in the Company, directly or indirectly, and will not acquire an interest as part of the Offering, nor is there any arrangement for MainVest, Inc. to acquire an interest.

**Type of Security Offered:** Other

**Other Description of Security:** LLC Membership Units

**Number of Securities Offered:** 50000

**Price per Security:** $100,000.00

**Method for Determining Price:** The Units are being valued at $2 per unit. The price of the Unit was set by Company management at the time of filing of this Form C. The determination of the price per Unit was made by the management on an arbitrary basis

**Target Offering Amount:** $100,000.00

**Oversubscription Accepted:** Yes

**Oversubscription Allocation Type:** First-come, first-served basis

**Maximum Offering Amount:** $3,900,600.00

**Deadline to Reach Target Amount:** 03-01-2024

### Annual Report Disclosure Requirements

**Current Number of Employees:** 30.00

**Total Assets (Most Recent Fiscal Year):** $210,734.00

**Total Assets (Prior Fiscal Year):** $73,421.00

**Cash & Cash Equivalents (Most Recent Fiscal Year):** $100,204.00

**Cash & Cash Equivalents (Prior Fiscal Year):** $45,353.00

**Accounts Receivable (Most Recent Fiscal Year):** $0.00

**Accounts Receivable (Prior Fiscal Year):** $0.00

**Short-Term Debt (Most Recent Fiscal Year):** $66,934.00

**Short-Term Debt (Prior Fiscal Year):** $8,951.00

**Long-Term Debt (Most Recent Fiscal Year):** $304,392.00

**Long-Term Debt (Prior Fiscal Year):** $128,029.00

**Revenues/Sales (Most Recent Fiscal Year):** $351,183.00

**Revenues/Sales (Prior Fiscal Year):** $135,774.00

**Cost of Goods Sold (Most Recent Fiscal Year):** $127,633.00

**Cost of Goods Sold (Prior Fiscal Year):** $42,169.00

**Taxes Paid (Most Recent Fiscal Year):** $0.00

**Taxes Paid (Prior Fiscal Year):** $0.00

**Net Income (Most Recent Fiscal Year):** $-131,065.00

**Net Income (Prior Fiscal Year):** $-84,373.00

**Jurisdictions Offered:**

ALABAMA, ALASKA, ARIZONA, ARKANSAS, CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, DISTRICT OF COLUMBIA, FLORIDA, GEORGIA, HAWAII, IDAHO, ILLINOIS, INDIANA, IOWA, KANSAS, KENTUCKY, LOUISIANA, MAINE, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI, MISSOURI, MONTANA, NEBRASKA, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, NORTH DAKOTA, OHIO, OKLAHOMA, OREGON, PENNSYLVANIA, PR, RHODE ISLAND, SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, TEXAS, UTAH, VERMONT, VIRGINIA, WASHINGTON, WEST VIRGINIA, WISCONSIN, WYOMING

### Signatures

**Issuer:** Tallgrass Pictures LLC

**Signature:** Jeffrey Brown

**Title:** Owner and CoFounder

---

**Signature:** Jeffrey Brown

**Title:** Owner and CoFounder

**Date:** 03-13-2023

---

**Signature:** Jennifer Chen

**Title:** Owner and CoFounder

**Date:** 03-13-2023