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Investment FAQs

North Coast Co-op has a unique investment structure. In addition to Membership shares and Sustaining shares, we also have dividend-earning preferred shares. We hope that you will considering further investment with us!

1. What is a preferred share?

2. Why is North Coast Co-op offering preferred shares?

3. How does my investment benefit North Coast Co-op?

4. What are the risks of this investment?

5. How do I learn about the specific details of the offering?

6. Who determines the dividend rate?

7. How does the rate compare with other investments?

8. How will I receive my dividends?

9. Can I pull my funds out at any time?

10. How secure is my money?

11. What are the tax implications of my investment?

12. Will I receive regular statements about my investments?

13. Will my investment be made public to other member-owners or anyone?

14. Will I get a larger say in North Coast Co-op’s governance and operations?

15. What happens if North Coast Co-op dissolves?

16. Is there a minimum or maximum number of shares I can purchase?

17. How do I buy preferred shares?

 

What is a preferred share?
North Coast Co-op preferred shares are dividend-bearing investments and are referred to as Class C Shares.

•  Class C Shares pay a dividend based on the size of the investment and not on the amount of patronage.

•  Class C Share purchases are voluntary investments made at each member-owner’s discretion—no member-owner is required to purchase preferred shares as a condition of membership.

• Class C Shares carry no voting rights.

Why is North Coast Co-op offering preferred shares?
This offering provides member-owners the opportunity to invest funds in our local business, know how their money is being used, and earn a competitive return on their investment.

How does my investment benefit North Coast Co-op?
North Coast Co-op benefits by lowering its financing costs. The dividend rates that it pays on preferred shares are lower than the interest rates it would pay on bank loans.

What are the risks of this investment?
The preferred shares are not insured and, like nearly all investments, have an element of risk. Detailed information, including risk factors, is included in our Shareholder Disclosure Document.

How do I learn about the specific details of the offering?
Prior to purchase you will receive a Shareholder Disclosure Document providing detailed financial information, background and history, as well as plans and financial projections. The Shareholder Disclosure Document has been reviewed by the California Department of Business Oversight as part of its process of granting North Coast Co-op a permit to offer shares for sale to member-owners.

Who determines the dividend rate?
California law requires North Coast Co-op’s Board of Directors to set a rate which is appropriate to maintain financial integrity. After studying and comparing rates on financial products offered by financial institutions in the area, the board’s Finance Committee makes a recommendation quarterly to the board of directors. The board makes the final decision on rates.

How does the rate compare with other investments?
The rate offered by North Coast Co-op is competitive with investment products offered by credit unions and banks. A preferred share investment in your cooperative is significantly different from such a public offering inasmuch as it is non-transferable and is not insured. We urge you to compare the rates on our offering with other investments and to read and understand the Shareholder Disclosure Document.

How will I receive my dividends?
Each quarter North Coast Co-op’s board will decide if dividends will be paid for the following quarter. Dividends accrue quarterly and are paid out annually in April or May, following our fiscal year-end. If the total amount of a shareholder’s annually accrued dividends is less than $50 the earned dividends will accumulate in the shareholder’s account. If the annually accrued dividend is greater than $50, a check will be issued for the accrued dividend.

Can I pull my funds out at any time?
While there are no fixed terms on Class C preferred shares, North Coast Co-op has up to one year from the date of receiving a shareholder’s written notice of their intent to sell the share back to pay the redemption amount (the purchase price plus unpaid dividends accruing up to the date of payment).

How secure is my money?
Like any investment there is risk and these investments are not insured. If the Co-op were to experience significant economic difficulty your entire investment might be lost. However, North Coast Co-op’s operation and finances are controlled by its member-owners, through the board of directors, and membership is informed of how its investments are being re-invested into the well-being of North Coast Co-op and its surrounding community through North Coast Co-op’s Annual Report.

What are the tax implications of my investment?
Dividends earned on preferred shares are considered to be taxable income. Shareholders will receive IRS 1099 forms when applicable.

Will I receive regular statements about my investments?
Statements are sent out to shareholders after the end of each quarter (June, September, December and March). These statements indicate the total number of shares held in the shareholder’s account as well as dividends earned that quarter and any share transactions for the year.

Will my investment be made public to other  member-owners or anyone?
No. North Coast Co-op’s privacy policy applies. Your investment will not be disclosed to any other member-owners or third parties. Information about your share account is kept private and is only accessible by authorized staff.

​Will I get a larger say in North Coast Co-op’s governance and operations?
No. North Coast Co-op is founded on the principle of one  member-owner, one vote. Class C shares carry no voting rights; no investor will have any more say than any other member-owner.

What happens if North Coast Co-op dissolves?
The preferred nature of these shares refers to what would occur in the event that North Coast Co-op was to dissolve. In that case we have a legal obligation to first pay off any third-party creditors and any outstanding third-party debts, prior to paying member-owners for their preferred shares. Once outstanding debts have been paid, preferred shares would be redeemed.

Is there a minimum or maximum number of shares I  can purchase?
Shares are sold in $10 increments, so the minimum amount to invest is $10. The maximum dollar amount that any Co-op member-owner can invest in preferred shares is $50,000.

How do I buy preferred shares?
There are two requirements to purchase preferred shares:

• You must be a North Coast Co-op member-owner.

• You must be a fully vested Fair Share member-owner (investing $300 in B shares).

If you have met those requirements, you can request  a Shareholder Disclosure Statement from our Membership Coordinator. If you have not met these requirements, our Membership Coordinator can discuss options for becoming a member-owner and/or Fair Share member-owner. Call (707) 822-5947 x 234.