Weaver Street Market Inc. OFFERING MEMORANDUM February 18, 2019 Co-op Owner Loans (Non-Voting) THESE CO-OP OWNER LOANS ARE OFFERED ONLY TO BONA-FIDE RESIDENTS OF THE STATE OF NORTH CAROLINA WHO ARE MEMBER-OWNERS OF WEAVER STREET MARKET INC. ANY OTHER USE IS UNAUTHORIZED. Weaver Street Market Co-op Owner Loans Total Offering $2,000,000 Discounts and commissions $0 Proceeds to Weaver Street Market $2,000,000 Term/Maturity Five Years* Interest Rate 5% Minimum Investment Required $20,000* Status Unsecured debt * Weaver Street Market, in its sole discretion, may vary the term or minimum investment on a case-by-case basis. Neither the Co-op Owner Loans nor the adequacy of this offering memorandum have been approved, disapproved, or passed on by the Securities and Exchange Commission, any state securities commission or any other regulatory body. Any representation to the contrary is a criminal offense. These Co-op Owner Loans are being offered under an exemption from federal registration pursuant to Section 230.147 of the Securities Act of 1933, as amended, on the ground that the offering is being made only to residents of North Carolina. These Co-op Owner Loans are being offered under an exemption from North Carolina registration pursuant to Section 78A-16(14) of the North Carolina Securities Act on the ground that the offering is being made by a Cooperative Corporation existing under Subchapter IV of Chapter 54 of the General Statutes of North Carolina. Neither the Securities and Exchange Commission nor any state agency has made an independent determination that the Co-op Owner Loans are exempt from registration. The Co-op Owner Loans are subject to certain risks, which are discussed beginning on page 5. The Co-op Owner Loans are not and will not be insured or guaranteed by the Federal Deposit Insurance Company (“FDIC”), the Securities Investment Protection Corporation (“SIPC”), or any other federal or state agency. Table of Contents Description of Co-op Owner Loans 2 Use of Proceeds 2 About Weaver Street Market 2 Weaver Street Market Leadership 3 About Cooperative Economics 4 Risk Factors 5 _______________________________________________________ Exhibits Historical Financial Statements 7 Projected Financial Results 9 Loan Agreement 11 Promissory Note 13 DESCRIPTION OF CO-OP OWNER LOANS The bylaws of Weaver Street Market authorize the issuance of interest bearing loans to member- owners of the cooperative. Pursuant to this Offering Memorandum, Weaver Street Market is issuing up to $2,000,000 of Co-op Owner Loans. The offering is by direct solicitation by the General Manager and such employees designated by him. No person shall be eligible to make a Co-op Owner Loan unless such person is currently a Consumer or Worker Owner shareholder in Weaver Street Market and intends to remain a shareholder, and is a bona fide resident of the State of North Carolina and intends to remain a resident. The Co-op Owner Loans shall be non-assessable, shall not be transferable or assigned to any person or entity other than Weaver Street Market, and may not be pledged or hypothecated. The minimum loan amount is $20,000, the maximum loan amount is $100,000, and the loan term is five years. (Weaver Street Market, in its sole discretion, may vary the loan term or minimum loan amount on a case-by-case basis.) The Co-op Owner Loans bear interest at the rate of 5% per annum, accrued interest being paid annually, on the anniversary date of the note. However, there can be no assurance that any interest shall be paid and any such interest is subject to, and subordinate to, claims of secured creditors, bankruptcy court rulings, or sufficient cash flows. Interest is taxable income to the recipient. The principal balance of the Co-op Owner Loans is due and payable in full to the holder at the end of the loan term along with the final interest payment. In the event that Weaver Street Market is liquidated, the Co-op Owner Loans will have a liquidation preference over the preferred stock, common stock and non-stock allocated equity. The co-op owner loans are not secured by land, building, or equipment and in the event of default, the status of the holder will be unsecured. Holders of the Co-op Owner Loans have no voting rights in Weaver Street Market. The Co-op Owner Loans may be extended at the end of the term upon mutual agreement of Weaver Street Market and the lender. USE OF PROCEEDS The net proceeds from the offering will be utilized to open a new Weaver Street Market store in downtown Raleigh and to make improvements to the existing stores. ABOUT WEAVER STREET MARKET Weaver Street Market’s first retail store opened in Carrboro in 1988 in order to sell the highest quality food and to create a vibrant community gathering place. At the time of its opening it was the only natural food store in Carrboro and Chapel Hill. From first year sales of $3 million, 2 Weaver Street Market’s annual sales have climbed to $40 million, making it the largest food cooperative in the Southeast. Weaver Street Market opened a second store in Southern Village in Chapel Hill in 2002, and a third store in downtown Hillsborough in 2008. Like the Carrboro store, these stores provide quality foods and serve as vibrant community centers. Weaver Street Market owns the portion of the building that the store occupies in both of these locations. In 2008, Weaver Street Market opened a “Food House” production facility to supply baked goods and prepared foods to its retail stores. The Food House leases 20,000 sq.-ft. of space in the Hillsborough Business Center, approximately one mile from the Hillsborough store location. The Food House is also the location of Weaver Street Market’s administrative departments including finance, IT, human resources, merchandising and marketing. Raleigh Expansion Weaver Street Market will open a fourth store in downtown Raleigh in spring 2019. The 12,600- square-foot store will be located at The Dillon, a mixed-use development in the Warehouse District. The store will have a large indoor and outdoor dining mezzanine, a tasting kitchen, and new prepared foods offerings. Once this store is established, Weaver Street Market plans to open additional stores in Wake County. Worker and Consumer Ownership A distinguishing feature of Weaver Street Market is its worker and consumer ownership structure, which is unique among US food cooperatives. Weaver Street Market has 20,000 consumer owners and 210 worker owners. Consumer ownership shares cost $75 and worker owner shares cost $500. Consumer Owners receive a patronage dividend based on profits and purchases, and Worker Owners receive a patronage dividend based on profits and hours worked. Local Food Weaver Street Market partners with 200 local and co-operative food producers. Approximately 50% of sales are from local and co-op producers. Community Connection Weaver Street Market is recognized for the strength of its connection with the community. Each store is located in a downtown center and has played a central role in activating its downtown. Weaver Street Market actively cultivates its community connection through outdoor music events at its stores. It also partners with other organizations to sponsor community events such as the Piedmont Farm Tour and holiday parades. Weaver Street Market partners with local non-profits to end food insecurity. Through its round- up program, it has contributed over $1 million to these organizations over the last three years, with 100% of the money going towards fresh, healthy foods for the food insecure. WEAVER STREET MARKET LEADERSHIP Board of Directors and Officers A board of seven directors governs Weaver Street Market. Consumer owners elect two of the directors; worker-owners elect two of the directors; the General Manager is automatically a director; and the board appoints two directors. The directors serve two-year terms. The board elects a Chair, Secretary, and Treasurer annually. The directors are compensated annually with $1,200 in gift cards to be spent at its stores. 3 Chair – Jon McDonald is an elected worker-owner representative on the Board. He is the manager of the bread bakery at the Food House. Secretary – Dave Bright, who joined the co-op in 1996 as a consumer owner, served as an elected Director from 2009 to 2011 and since 2012 has served as an appointed Director. Dave works as a facilities manager for Novo Nordisk. Treasurer - Alice Ammerman is an elected consumer-owner representative who has served on the board since 2018. She is a professor at the Gillings School of Global Public Health at UNC Chapel Hill and the director of the Center for Health Promotion and Disease Prevention Linda Stier is an appointed director who has been on the Board for 25 years. She is a governance consultant to cooperatives and non-profit organizations Glenda Claire is an elected consumer-owner representative whose board term started in January 2019. She is an Associate Minister at Union Baptist Church in Durham and host of the We All Got ISSUES radio show. Charles Traitor - is an elected worker worker-owner representative who has been on the Board for three years. He works in the produce department in Carrboro. Ruffin Slater (general manager) has been on the board of directors since Weaver Street Market opened in 1988. General Manager To fulfill its responsibility to the member-owners and to help Weaver Street Market realize its mission, Weaver Street Market’s board of directors hires a General Manager. The General Manager acts as Weaver Street Market’s agent, conducting the actual affairs of the business.