Project Idea

4UK Ltd, located in Sofia, specializes in the production and sale of CBD-infused e-cigarettes. The company produces vapes in various flavors that meet established quality standards. The products are sold both under the company’s own brand and for other brands. The company also engages in wholesale distribution and sells its products through online channels.

4UK Ltd specializes in the production of e-cigarettes infused with cannabidiol (CBD). The products are available in several flavors and have the following technical specifications:

Product Flavors:

• Blueberry
• Lemon Haze
• Mango
• Orange
• Strawberry

4UK Ltd operates legally and fully complies with the current legislation in Bulgaria. The company’s activities do not require additional licenses or permits under the jurisdiction in which it operates.

The company produces products that meet quality and safety standards, ensuring that all devices deliver reliable and consistent performance.

Collateral and Guarantees

4UK Ltd has outlined the collateral and guarantees for the loan it seeks to secure, which are critical factors for the investor to assess the risk of the investment. The collateral offered by the company provides a significant level of security, ensuring the lender’s confidence in the company’s ability to meet its financial obligations.

Collateral Provided by 4UK Ltd

1. Production Equipment:
   The company currently holds production equipment valued at €99,197, which includes machinery essential for manufacturing its CBD vape products. This equipment is already in operation, contributing directly to the company’s ability to scale production.
2. New Production Lines:
   As part of the loan agreement, the company will purchase three additional production lines (including capping machines, filling machines, and packaging lines), which will be valued at approximately €138,000. These new lines will significantly increase the company’s production capacity and are intended to meet the forecasted demand from its signed contracts. The new equipment will serve as additional collateral, providing further security for the loan.
3. Inventory:
   The company’s finished goods inventory, valued at approximately €200,000, will also be pledged as collateral. This inventory consists of products that are ready for shipment and awaiting delivery to customers. The high turnover of these goods provides additional reassurance that the company can generate sufficient revenue to meet its debt obligations.

Types of Guarantees Provided

4UK Ltd provides both tangible and operational guarantees to secure the loan:

1. Tangible Guarantees:
   The main tangible guarantees include the production equipment and the new production lines, which will be clearly documented and legally pledged as collateral for the loan. These assets hold significant value and are crucial to the company’s operations, reducing the risk for the lender.
2. Inventory Guarantee:
   The company will also pledge finished goods inventory as part of the guarantee. This inventory will be periodically updated and monitored to ensure that it remains in line with the company’s sales forecasts.
3. Company’s Future Cash Flow:
   While not a physical asset, the company’s projected cash flow from signed contracts with major clients such as Karelia Bulgaria Ltd, UAN Vape Ltd, and Konopshop Ltd provides an important operational guarantee. The contracts ensure a steady stream of revenue, further strengthening the company’s ability to meet repayment obligations. This guarantee is supported by the fact that the company has secured guaranteed orders for the next 12 months, providing a clear financial forecast.

Conclusion and Recommendation

Based on the company’s tangible and operational guarantees, the loan appears to be well-secured. The assets pledged as collateral, including the production equipment, new machinery, and finished goods inventory, offer substantial protection for the lender. Additionally, the guaranteed revenue from contracts with key clients ensures that the company is likely to meet its repayment obligations.