Investor Relations

UPcyclity® Inc. Benefit Corporation Report 2013

Narrative:
UPcyclity Inc. was incorporated as a benefit corporation in the state of California on August 6, 2012.

UPcyclity is in the process of developing an e-commerce market place and social community that seeks to promote Upcycling as an environmental lifestyle that helps eliminate waste. The definition of Upcycling is “the repurposing of discarded or used materials into new products with a higher value”.

UPcyclity is a niche business that operates within the handicrafts and retail industries as a niche market channel within the United States. Total sales for all handicrafts in the United States were estimated to be $30BB in 2013. The Upcycling market is estimated to be 10% or approximately $3BB of that total. In our strategic analysis, we found that there are currently several websites that address sustainability and environmental concerns but only focus on one model of service and that none focus exclusively on the niche channel market of Upcycling. Having proactively researched the various strategic alternatives, we feel we have identified both a niche market and a way to do create an exclusive market place and social community through entrepreneurship, social enterprise and disruptive innovation.

As a Benefit Corporation, UPcyclity’s business strategy is founded on the SEER model, pioneered by ex-Patagonia CEO Michael Crooke, of sustainable business through a quadruple bottom line of:

  • Quality of Product/Service
  • Social Responsibility
  • Environmental Stewardship
  • Financial Performance

UPcyclity will operate their website and social community under the name UPcycledCity.com, where we seek to provide a virtual and exclusive online community for Upcyclers to sell their goods. Besides being an e-commerce marketplace for juried and certified Upcycled products, UPcycled City is also a social community that promotes the values and benefits of Upcycling as:

  • A solution to our problem of waste
  • A profitable way to divert waste from landfills
  • A way to reduce the use of both virgin and non-renewable resources
  • A way to close the Recycling loop
  • A process that can be practiced as a DIY, as a handicraft business or in a mass produced manufacturing process
    • An e-commerce market place that brings only certified Upcycled products to Consumers (see UP® certification logo) and differentiates from non –sustainable products.
    • An awesome niche product that offers selling shops, direct marketing, advertising and educational tools about the benefits of Upcycling and other green practices.
    • A community dedicated to social, ethical and environmental responsibility for all our stakeholders.
    • A social website that gives exclusive visibility to the Upcycling community.
    • An organized movement to change the consumer culture from buying new products made from new materials to Upcycled products made from waste.

The bottom line is that, at any given time, there can be multiple e-commerce sites where an Upcycler can sell their products but none that are exclusive to them and that are a true social community whose mission and public benefit is to promote Upcycling as a way to reduce our waste problem.

UPcycility’s social mission is an explicit commitment to Upcycling as a sustainable solution that helps reduce our waste stream and environmental impact. 3rd party BCorp as required certified UPcyclity, as a BCorp in February of 2013 for all Benefit Corporations incorporated in the state of California. As a Benefit Corporation, it was important to us to belong to a global movement like the B Corp where its members are committed to making a social impact and help build a sustainable world for the future of all mankind. This certification along with our own UPcyclity certification makes us more transparent to all of our stakeholders and helps to further align our core values.

We are proud to announce the following general public benefits and community outreach that were accomplished in our fiscal year of 2013.

  • Nominated as outstanding BCorp by the Sustainable Business Council of Los Angeles
  • Participated in the The Hub LA steering committee for Social Impact.
  • Continued to grow Grow our Facebook, Twitter and Pinterest Brand pages to create awareness of our company’s mission and benefit to help eliminate waste.
  • Daily posts on Upcycling, DIY, Environmental and Green Articles helped establish a community of 1000 likes and 300 Upcycling & Green brands organically.
  • Twitter @ https://twitter.com/lytgrn_tips –posted almost 4000 posts on Upcycling and increased followers to 600.
  • We attended the BCorp Retreat in Boulder, Co. where we helped raise funds for the local community flood relief.
  • We hired a Los Angeles based web site design firm to build the UPcyclity website with launch date in early Spring 2014.
  • We donated over 400 lbs. of discarded material to the Los Angeles County Prison System a non-profit that teaches female prisoners how to sew.
  • We helped found the SoCal BCorp Group- Los Angeles focused on fostering Community Outreach programs and local B Corps event.

With our first full year of business came some disappointments too.

  • We started over on the building of the website having vetted several options and concluded the Drupe software was not a good fit.
  • We are still in start up and business development and we have not been able to hire any full time employees allowing us to fully launch our community outreach.

UPcyclity as a Benefit Corporation has a social purpose of creating a “specific public benefit” which is the facilitating the repurposing of waste or discarded materials into new, useful products.

Our key metric is the number of pounds of materials that are diverted from landfills and are Upycled.

In 2010, we started Pepe & Sherina Designs (P & S), now a division of UPcyclity Inc., where we make 100% Upycled Sock Monkeys. and related Upyclcled products. During 2013, we continued to build the sales and meet our specific public benefit.

  • P & S makes Upcycled Sock Monkey
  • By practicing Upcycling, we not only better understand the needs of all our stakeholders but share their pain points.
  • And understand ways to improve our operating efficiencies, profit margins, and productivity as a company
  • In 2013, we Upcycled approx 1000 pounds of waste respectively.

Facebook UPcyclity Fan Comments:

“You give me so much inspiration. Today while shopping for supplies to make a Ben Franklin costume for my 10 year old for a school event on Thursday, I went to the thrift store and used stuff from my craft bins…so as always, thank you for helping me look for ways to reduce, reuse and my new favorite word UPCYCLE;-)”

Thank You So Much Jeffrey for all of your kind words & support! We appreciate your work and for sharing so many great posts!

“We would love to be part of your Upcycling Community in anyway possible……..Cheers from one upcycler to another!”

UPcyclity’s initial assessment of the overall social and environmental performance was completed and submitted to B Lab, a third-party standard in December of 2012. The certification process took several months for completion and we were certified as a B Corp on March 7th, of 2013 with a score of 97.8 with 80 needed to comply.

More discussion of work, thought, time you put into developing policies, practices, etc. to get this score. What does it represent?

Initial B Corp Score:

*It should be noted that we scored 34.7 out of an average of 9 points available in the Environmental category, which is central to UPcyclity’s mission as a benefit corporation, and our specific public benefit of diverting waste.

In order for UPcyclity to meet its mission and specific public benefit we established the following policies and metrics on Social and Environmental Performance:

Section 1: Frequency
On no less than on an annual basis, UPcyclity will monitor the organization’s performance on Social and Environmental policies, actions and results. Additionally, UPcyclity may review these policies at any given time throughout the year.

Section 2: Purpose
A) Be responsible and responsive to stakeholders. The purpose is to report to stakeholders including stockholders as well as customers and the general public and to create a clear level of transparency in UPcyclity as a Benefit Corporation and in its business practices.

B) To generate a report available to any regulatory agency to demonstrate the results of efforts to be socially and environmentally active as determined by the UPcyclity Bylaws.

Section 3: How the performance will be monitored.
Performance will be monitored and tracked on the follow goals of UPcyclity:

  1. To create an awesome niche product and online community that offers selling shops, direct marketing, advertising and educational tools about the benefits of Upcycling and other green practices.
  2. Upcyclers who sell their products will be certified by UPcyclity to differentiate themselves from non-sustainable handi-crafters (Etsyers)
  3. Marketing and Advertising services so that consumers have increased access to and awareness of, the benefits of Upcycling
  4. Long-term vision: Create an organized movement to change the consumer culture from buying new products made from new materials to Upcycled products.
  5. Teach consumers how the re-purposing of waste or discarded materials through innovative Upcycling will result in bringing social, ethical and environmental responsibility to our planet.
  6. By offering only premium, juried, high quality Upcycled products that are certified, we will make the quality/environmental impact of both the seller and UPcyclity more transparent.
  7. Website will be reviewed to ensure that all activity performed on the site will meet UPcyclity values, transparency and sustainable company practices.A) Vendors will be periodically surveyed to ensure compliance
    B) Employees will complete an annual survey

Section 4: Reporting
All data collected, will be analyzed and reported to the Board of Directors and available for stockholders and the appropriate regulatory agencies.

Owners:

Jeffrey S. Lemansky – Founder & Upcycler in Chief

David L. Schroeder – Founder & V. P. of Business Relations

Board Opinion:

The board of directors of UPcyclity approves this report as accurate and affirms that Upcyclity has pursued its general public benefit purpose and specific public benefit purpose. The board has led UPcyclity to undertake every reasonable effort to fulfill its mission of which is the facilitating the repurposing of waste or discarded materials into new, useful products, as it builds its on line marketplace and community presence.

Connection to Assessor: (B Lab)

UPcyclity management has no connection to B Lab or its directors, officers or material owners that would have affected the credibility of their objective assessment of their 3rd party standard.