Investment Risks disclaimer

We believe it is vitally important that you read and fully understand the following risks of investing.

Investment Risks

All investments, including agricultural real estate, is speculative in nature and involves substantial risk of loss. We encourage our investors to invest carefully. We also encourage investors to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from professionals which we believe are reliable, but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way warrant or guarantee the success of any action you take in reliance on our statements or recommendations.

Past performance is not necessarily indicative of future results. All investments carry risk and all investment decisions of an individual remain the responsibility of that individual. There is no guarantee that you will not face losses. All investors are advised to fully understand all risks associated with any kind of investing they choose to do.

Hypothetical or simulated performance is not indicative of future results. Unless specifically noted otherwise, all return examples provided in our websites and publications are based on hypothetical or simulated investing. We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because hypothetical or simulated performance is not necessarily indicative of future results. 

Don’t enter any investment without fully understanding the worst-case scenarios of that investment.

Forward-Looking Statements

Our analysis includes predictions, estimates or other information that should be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially.

You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

We have attempted to present some risk factors relating to our business that may affect our predictions. You should also review our website at ChandlerOrchards.com/risks/ for a more complete discussion of these and other risks.

Agricultural Risks

Every agricultural undertaking involves risk. There are many risk factors that investors should study in-depth and evaluate fully before making the decision to invest:

  • Yields. Our orchard may not achieve the yields we project. It may also take significantly longer to reach maturity (the point at which maximum yields are realized) than we project. If the orchard does not achieve the projected yields or takes longer to reach maturity, the profitability and return on investment would differ significantly from our projections.
  • Hail. Hail may reduce the yield of any individual harvest by damaging or destroying the fruit. It can also reduce the commercial quality and the value received in the market since damaged fruit, once harvested, cannot be sold for full price. In severe cases, a tree or multiple trees could be killed.
  • Frost. Fall frost damage may occur if the temperature drops below freezing rapidly in the late fall or early winter. “Winter kill” frost damage may occur when extremely low sub-freezing temperatures occur during the winter months which could damage young trees and saplings. In severe cases, a tree or multiple trees could be killed.
  • Warm Temperatures. Walnut trees need 1000 chill hours per year for proper development. If there were to be a year in which extremely warm temperatures failed to produce 1000 chill hours, the harvest that year would be reduced and the commercial quality of the fruit will be suboptimal.
  • Insects, Mites & Invertebrates. Walnut trees are susceptible to damage from a variety of pests, including but not limited to Aphids, Codling Moth, European Red Mite, Fall Webworm, False Chinch Bug, Frosted Scale and, Fruit Lecanium, Fruittree Leafroller, Pear Scale, Navel Orangeworm, Flatheaded Borer, Redhumped Caterpillar, Scale, Southern Fire Ant, Walnut Blister Mite, Walnut Husk Fly, Walnut Scale, Walnut Twig Beetle, Webspinning Spider Mites, among others. In severe cases, a tree or multiple trees could be killed.
  • Nematodes. Walnut root systems could be attacked and damaged by nematodes present in the soil. In severe cases, a tree or multiple trees could be killed.
  • Vertebrates. Walnut trees could suffer damage from vertebrates including, but not limited to squirrels, gophers, voles, mice, etc. In severe cases, a tree or multiple trees could be killed.
  • Diseases. Walnut trees are susceptible to a number of different diseases, including but not limited to, Anthracnose, Armillaria Root Rot, Oak Root Fungus, Blackline, Botryosphaeria, Phomopsis Cankers, Branch Wilt, Crown Gall, Deep Bark Canker, Paradox Canker, Phytophthora Root Rot, Crown Rot, Shallow Bark Canker, Thousand Cankers Disease, and Walnut Blight. In severe cases, a tree or multiple trees could be killed.
  • Weeds & Grasses. Weeds & grasses compete with the walnut trees for nutrients and proper weed-management is an important part of orchard maintenance. If herbicide-resistant weeds were to take hold, our costs to keep the orchard floor clear of weeds would increase.

Business & Market Risks

As a producer, we have no direct control over a number of prices that form key inputs/outputs in our supply chain. There are a number of market risks that could decrease the profitability of the orchard:

  • The Price Of Walnuts. Walnuts are a commodity. We have no control over the market price. Prices could decrease in the future making the growing of walnuts less profitable or even unprofitable. If prices were to drop below breakeven levels, investors would suffer losses every year until prices rose above breakeven levels.
  • Cost of Inputs. We rely on skilled and unskilled labor to carry out the tasks needed to maintain the orchard. Should the cost of labor increase significantly in the future, profits would be reduced. We rely on the local utility for electric power to pump our wells. Should the price increase significantly in the future, profits would be reduced. We use diesel fuel, agrochemicals, fertilizers & micronutrients, and other inputs that are key to maintaining the orchard. Should these prices increase significantly in the future, profits would be reduced.
  • Transportation & FOB Pricing. Our orchard is based in Mendoza and the key walnut export markets are based in China, the Middle East, and Europe. Our projections are based on receiving FOB pricing. Should transportation costs increase in the future or should we fail to receive the FOB price for our harvest, our revenue will be less than projected.
  • Customers. If we fail to sell our harvest to overseas buyers or do not maintain important commercial relationships, we would be unable to export our harvest and would be forced to sell to local intermediary. We would receive less than the FOB price and revenue would be less than projected.
  • Theft. During any given year, the harvest could suffer losses from theft. If this were to occur, revenue would be less than projected.
  • Financing. Should a significant portion of investors fail to make quarterly payments, we would be forced to seek other financing. This would increase our expenses and reduce the projected profits.
  • Administration & Management. Our projections are based on efficient and effective management and oversight of the orchard. If management fails to manage the orchard efficiently, the results will be significantly less than projected.

Political & Macroeconomic Risks

As a producer, we have no control over changes in key economic & political policies that could decrease the future profitability of the orchard:

  • Import Tariffs. If input tariffs were applied to walnuts in any of our key export markets, the price we receive could be significantly less than projected.
  • Export Tariffs. Should Argentina apply an export tariff to walnuts, the price we receive could be significantly less than projected.
  • Trade Wars, Agricultural Subsidies & Dumping. Should any walnut-producing country decide to enter into dumping practices, trade wars, or offer agricultural subsidies to walnut growers, we may not be able to compete in the future.
  • Exchange Rates. Although unlikely, should the Argentine peso appreciate significantly, our dollar-denominated costs may be higher than projected.
  • Taxes. National, provincial, and municipal tax rates could increase in the future, reducing our profitability.
  • Inability To Export. Should we be unable to export our harvest for any reason, including but not limited to, non-tariff trade barriers, export controls, sanitary controls, etc., we would not receive the FOB price causing revenue to be significantly less than projected.

Disclaimer

All calculations and data presented within our publications and digital marketing and media including but not limited to websites, brochures, presentations, proposals, and return models are deemed to be accurate, but accuracy is not guaranteed. The projected returns on investment are intended for the purpose of illustrative projections to facilitate analysis and are not guaranteed by the company or its affiliates and subsidiaries. Past performance is not an indicator of future results. 

The information provided herein is not intended to replace or serve as a substitute for any legal, real estate, tax, agricultural, or other professional advice, consultation or service. The prospective buyer should consult with a professional in the respective legal, tax, accounting, real estate, agricultural, or other professional area before making any decisions or entering into any contracts pertaining to the property or properties described herein. 

All marketing and media material has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest. The information contained herein is not a substitute for a thorough due diligence investigation by prospective buyers. All potential buyers must take appropriate measures to verify all of the information set forth herein.

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