Prior to incorporation, the Butte Food Co-Op Steering Committee chose to issue preferred stock as part of our cooperative structure in order to help meet our capitalization needs for the store.
Preferred stock (or preferred shares) are dividend-bearing investments in the Butte Food Co-Op’s equity. They differ from the member-ownership (common stock) that every Co-Op owner is required to purchase in the following ways:
Preferred stock can be purchased at $500 per share. Anyone interested must complete, sign, and return a preferred stock purchase and disclosure form along with their payment. We are currently only accepting preferred stock payments by check via mail to maximize funds for the Co-Op.
Anyone interested in purchasing preferred stock should also read our Preferred Stock FAQs to understand the risks involved with the purchase.
Preferred stocks (also known as preferred shares) are dividend-bearing investments in theCo-Op’s equity. They differ from the member-owner common stock that every Co-Op owner is required to purchase to be an owner in the following ways:
Once the Co-Op makes a profit, the Co-Op Board of Directors may return dividends to its member-owners and preferred stock holders at an interest rate that will be determined by the Board. Preferred stock holders will be paid out first based on the size of investment.Dividends on common stock held by member-owners will be paid out second based on the amount of purchases made at the Co-Op.
The offering does not have a set term to the investment, and redemption of preferred stocks is entirely at the Board's discretion. When the cooperative is financially stable, theBoard intends to announce an offer to begin buying back preferred stocks.
Preferred stock may be assigned to third parties or to the cooperative association as determined by the Board of Directors.
This offering provides owners the opportunity to invest funds in our local business while earning a fair return on their investment. They are being offered at this time to help provide part of the financing for the Co-Op to open a store. The amount raised through the sale of preferred stocks will reduce our need to borrow money from financial institutions.
The preferred stocks that the Co-Op is offering for sale are not insured and, like nearly all investments, have an element of risk. By purchasing preferred stocks, you are making a good faith investment in the Co-Op. You should read carefully the entirety of the OfferingMemorandum, including the section entitled “Disclosures” and consult with your own financial or legal counselor, accountant or business advisor prior to making a decision to invest in stocks.
No. The Co-Op is founded on the principle of one owner, one vote. Preferred stocks carry no voting rights; no investor will have any more say than any other owner.
That is the estimated cost to open a new store in Butte. We hope to raise up to $1 million through the sale of preferred stock. Additional start-up costs, including operating capital, will be financed through member-owner stocks, sponsorships, and financing from credit unions and banks. This will allow us to move forward with building costs, sufficient cash reserves and a strong financial position to build a viable business during the first 2-3 years, which typically is the most vulnerable period for a new cooperative grocery.
Stockholders will have the opportunity to invest locally and know how their money is being used. Although the Board is unable to make any promises, its intention is to pay a better rate than a similar-sized investment is likely to provide through a traditional savings account at a financial institution. The Co-Op will have the benefit of accessing local funds without having a fixed repayment schedule.
We are selling up to 2,000 stocks at $500 each. Investors may purchase a single stock or many stocks - every investment counts!
Preferred stocks may be purchased by members, who must be natural persons residing in the United States, or non-members, which also may include corporations and non-residents of the United States.
The Cooperative may be dissolved or liquidated upon a decision of the Board and a two thirds (2/3) vote of the member-owners who participate in the vote. Upon dissolution of theCooperative, its assets shall be distributed in the following manner and order: (i) by paying or making provision for payment of all liabilities and expenses of liquidation; (ii) by redeeming any equity accounts which, if they cannot be paid in full, shall be paid on a pro rata basis; (iii) by distributing any remaining assets in a way that furthers the Cooperative’s mission, as determined by the Board.