Beruflich Dokumente
Kultur Dokumente
INVESTMENT STRATEGY
To seek out private companies in North America, South America, Africa and Europe and bring them public in the US marketplace primarily via Reverse Merger and simultaneously making a capital investment in the company.
Raising capital for small and medium size enterprises (SMEs) in the current global economic climate is challenging. Sophisticated corporate investors in general and established investment institutions in particular, are insisting on hybrid structures (debt/equity) as a way to protect their investment capital, when the funding is private. Exceptions to this dynamic exist when the company being funded receives investor bridge equity with piggy back investor registration rights prior to filing for full listing status.However, to go the route of being a public company can be difficult for SMEs, especially if you take the traditional approach of an IPO (Initial Public Offering).
WHY GO PUBLIC
THE ADVANTAGES
Access
to
Capital
It
is
easier
to
raise
money
as
a
public
company
than
a
private
company.
Investors
are
more
comfortable
because
there
is
sucient
informa8on
available
in
public
lings,
the
exit
is
faster,
and
the
valua8on
is
likely
higher.
Liquidity
Owners
are
prior
investors
have
a
way
to
cash
out
over
8me.
Growth
through
acquisi7ons
or
strategic
partnerships
A
public
company
can
use
its
stock
as
currency
for
acquisi8ons,
preserving
needed
cash
for
other
uses.
Stock
Op7ons
to
incen7vize
Through
ves8ng
of
op8ons,
a
longer-term
commitment
is
encouraged
from
senior
management
and
others.
WHY GO PUBLIC
DISADVANTAGES OF IPO
IPOs
cost
are
very
high;
An
IPO
from
start
to
nish
can
easily
take
a
year
or
more;
The
IPO
window
is
generally
considered
to
be
either
open
or
closed,
and
is
generally
only
available
to
companies
with
market
value
in
excess
of
roughly
$300
million;
In
an
IPO,
an
underwriter
can
cancel
a
deal
or
drama8cally
lower
an
oering
price
at
the
last
minute
because
of
market
condi8ons;
An
underwriter
oMen
may
suggest
or
even
insist
that
the
company
raise
more
money
in
the
oering
than
the
company
reasonably
needs,
crea8ng
greater
dilu8on
to
owners.
THE ACCEPTED ALTERNATIVE TO AN IPO IS GOING PUBLIC VIA A REVERSE TAKEOVER (RTO) ALSO CALLED REVERSE MERGER.
In
a
merger,
reverse
or
otherwise,
two
corpora8ons
join
together.
One
becomes
the
surviving
corpora8on;
the
other
becomes
the
non-surviving
corpora8on.
The
surviving
corpora8on
swallows
up
the
assets
and
liabili8es
of
the
non- surviving
corpora8on
and
the
laOer
simply
ceases
to
exist,
or
may
survive
as
a
wholly-owned
subsidiary
of
the
new
parent
company.
Next: Structure
SHELL SHAREHOLDERS
SHELL COMPANY
OPCO SHAREHOLDERS
RESULTS IN
SHELL SHAREHOLDERS OPCO SHAREHOLDERS
SHELL COMPANY
OPCO
Some reverse mergers are structured as an exchange of shares or simple asset acquisitions. The transaction generally ends up as a tax-free reorganization under IRS regulations, and whether the deal is a merger, share exchange, or asset acquisition, the net result tax wise is typically the same. In general, the tax treatment of reverse mergers is very straightforward and in almost all cases, the parties avoid the payment of a tax as a result of the transaction; After the reverse merger closes, the company is now a fully reporting public company with the companys shares traded on the OTC:QB. If the company meets the listing requirements of NASDAQ or another recognized exchange, it can apply to have its share capital traded on that market platform. The company will file quarterly and annual financial reports to keep the public aware of its business activities.
THE FOLLOWING WELL KNOWN COMPANIES HAVE GONE PUBLIC THROUGH REVERSE MERGERS:
Texas
Instruments
Inc.
Jamba
Juice,
Inc.
Berkshire
Hathaway,
Inc.
Tandy
Corpora8on
(Radio
Shack
Corpora8on)
Occidental
Petroleum
Corpora8on
Muriel
Siebert
&
Co.,
Inc.
Blockbuster
Entertainment
The
New
York
Stock
Exchange
This is the private placement of registered or unregistered shares of the companys common stock to investors. These shares are generally placed at a discount to the prevailing bid price of the companys stock; If the placement is of unregistered shares, the company will immediately le a registra8on statement to register the shares so that they are free trading and the investor can liquidate his posi8on.
Structured PIPE deals represent about 43% of all PIPE deals. Most investors choose to go the route of Conver8ble Preferred or Debt deals for several reasons. Some of the most signicant reasons are as follows: 144 holding period commences when you take ownership of the conver8ble instrument, not when you convert shares into common stock; This is important for transac8ons where no registra8on statement is being led and the investor is just wai8ng for the 6 month holding period to expire;
During this period the investor may be earning interest on his investment; 144 holding period commences when you take ownership of the conver8ble instrument, not when you convert shares into common stock; This is important for transac8ons where no registra8on statement is being led and the investor is just wai8ng for the 6 month holding period to expire; During this period the investor may be earning interest on his investment; In cases where the 144 holding period is coun8ng down, or an eec8ve registra8on statement is outstanding, the investor can Structure his conversion terms;
In
most
cases
the
Conver8ble
Preferred
or
Debt
instrument
will
probably
have
a
oa8ng
conversion
level,
subject
to
not
conver8ng
to
more
than
20%
of
the
companys
equity
in
each
converted
transac8on
(FINRA
rules
require
shareholder
approval
for
any
one-8me
issuance
of
common
stock
exceeding
20%
In
this
case,
the
investment
is
protected
because
the
investor
will
only
convert
when
it
is
in
his
favor;
Next: Equity Line of Credit is the 3rd Method of Raising Capital
In all cases, an Equity line is only drawn upon when a registra8on statement has registered the underlying stock in the equity line (some Hybrids allow for draw downs while the shares are not yet registered).
WEB IR Strategies Since most investors trade and research on- line, it is important to reach them on-line. Companies need the use of blogs, social networking, and targeted Web-based push marke8ng to connect with the natural buyers of their shares; Inuen7al nancial Web Sites and electronic investor newsleOers can have an impact that is more drama8c than tradi8onal sell-side analyst reports.
Next: Creative Capital Ventures Strategy
Once a target company is located and veOed (thorough due diligence), then Crea8ve Capital Ventures Ltd. will locate a viable U.S. or Interna8onal listed Public Company, or le an S1 registra8on statement from scratch. Parameters for selec8ng a viable Target Company: Strong Management; Developed Product or Product line; No Pure Start-ups; Marke8ng Plan in place; Genera8ng some level of Revenue; Growth Stage of Industry and future trends; Limited Debt on company books we do not raise capital to pay o debt.
Crea8ve Capital Ventures Ltd. will provide the Target Company with the capital required to purchase the restricted stock of the public shell (US$350,000- $500,000) and the funds required to complete legal and accoun8ng (approximately $60,000 - $80,000), or the funds required to le an S1 registra8on statement (approximately $40,000 - $50,000). These funds will be loaned to the Target Company. Crea8ve Capital Ventures Ltd. will also buy as much of the free trading stock that is available in the Public Company for its own account; AMer the comple8on of this Reverse Merger the shareholders of the Target Company will own approximately 85% -90% of the Public Company which is now the Opera8ng Company (OPCO) and Crea8ve Capital Ventures Ltd. will own about 8%-9% of the public company in free trading shares.
LEGACY SHAREHOLDERS
Own 1% - 2% Shares outstanding in Free trading stock
OPCO SHAREHOLDERS
Own 85% - 90% Shares outstanding in Restricted Shares
SHELL COMPANY
Once the Public Company becomes the Opera8ng Company (OPCO) Crea7ve Capital Ventures Ltd. will nance the OPCO either through a Structured PIPE deal or Equity Line of Credit. Simultaneously, the funds loaned to the OPCO to complete the Reverse Merger will be converted into a Structured PIPE as well; Crea7ve Capital Ventures Ltd. will experience immediate liquidity with the free trading shares of OPCO it owns from the eort employed by the IR/Promo group we hired at the close of the Reverse Merger (Stock promo8on eort usually commences 1-2 months aMer close of RTO). It is probable that at this point in the investment we will have recovered our original loan and possibly a mul8ple of that loan.
Shares underlying the Structured PIPE and/or the Equity Line will be sold upon eec8veness of Registra8on statement or 144 8me period lapses (6 months). The conversion level of the Structured PIPE deal is oa8ng so Crea7ve Capital Ventures Ltd. investment is always protected; Crea7ve Capital Ventures Ltd. goal is to achieve a minimum of 100%-150% return on capital in all its investments conducted under the framework discussed herein. This is achievable as a result of the 8ghtly held free oat of each RTO completed by Crea7ve Capital Ventures Ltd.
Crea7ve Capital Ventures Ltd. is an oshore registered company, with one hundred percent (100%) of its common shares (vo8ng shares) owned by the manager, Euro IPO Services Ltd (BVI).
Crea8ve Capital Ventures Ltd. has Authorized 10,000,000 shares of Series A Preferred Stock (hereinaMer "Shares") at US$10.00 per share; Shares will be sold at US$10.00 per share prior to the rst Net Asset Value (NAV) Calcula8on and then at the NAV thereaMer, subject to the 3 day "window" following the calcula8on of the NAV, during which period funding may be refreshed; The Shares will have a CUSIP/ISN # for bank deposit purposes and Crea8ve Capital Ventures Ltd. shares will be listed on a foreign Stock Exchange for NA V pos8ng purposes only; Purchasers of the Shares will face a One Year lock up period and then must provide 90 Day no8ca8on for Redemp8on at the NAV calcula8on on Payment Date;
Crea8ve Capital Ventures Ltd. has Authorized 10,000,000 shares of Series A Preferred Stock (hereinaMer "Shares") at US$10.00 per share; Shares will be sold at US$10.00 per share prior to the rst Net Asset Value (NAV) Calcula8on and then at the NAV thereaMer, subject to the 3 day "window" following the calcula8on of the NAV, during which period funding may be refreshed; The Shares will have a CUSIP/ISN # for bank deposit purposes and Crea8ve Capital Ventures Ltd. shares will be listed on a foreign Stock Exchange for NA V pos8ng purposes only; Purchasers of the Shares will face a One Year lock up period and then must provide 90 Day no8ca8on for Redemp8on at the NAV calcula8on on Payment Date;
The NAV will be calculated on the last trading day of every month. The NAV calcula8on takes into account the value of each investment the company is long in terms of: cash and cash equivalents, Debentures, Preferred shares and Common Stock (free trading and restricted shares) with appropriate haircuts in place. The NAV computa8on will be calculated by an independent outside accoun8ng group based on industry wide methods.
MANAGEMENT FEES
The
Manager
of
Crea7ve
Capital
Ventures
Ltd.
is
Euro
IPO
Services
Ltd.
(BVI).
The
Manager
will
be
paid
a
2%
fee
on
Assets
Under
Management
(AUM)
on
a
quarterly
basis.
In
addi8on,
the
Manager
will
be
paid
the
following
Management
Incen8ve
Fee:
20%
management
Incen8ve
Fee
(paid
quarterly)
on
Net
Investment
CASH
Return
greater
than
7%
(Net
Investment
CASH
Return
=
Cash
prot
on
actual
stock
sales
over
the
quarter,
less
2%
management
fee,
i.e.,
20%
share
of
realized
cash
prot
above
the
9%
Low
Water
Mark);
40%
management
Incen8ve
Fee
(paid
quarterly)
on
Net
Investment
CASH
Return
greater
than
20%
(Net
Investment
CASH
Return
=
Cash
prot
on
actual
stock
sales
over
the
quarter,
less
2%
management
fee,
i.e.,
40%
share
of
realised
cash
prot
above
the
20%
High
Water
Mark).
Next: The Manager
THE MANAGER
Euro
IPO
Services
Ltd
is
Bri8sh
Virgin
Island
registered
company
and
the
Manager
of
Crea8ve
Capital
Ventures
Ltd.
The
Managing
Directors
of
Euro
IPO
Services
Ltd.
are:
Julius Csurgo, Managing Director
The founder and Managing Director of Merger Law Associates Ltd. and Antevorta Capital Partners Ltd., brings over 40 years of entrepreneurial and financial experience. He has been involved in many facets of International business development in such fields as real estate, retail, resources, financial, healthcare and technology businesses, consulting for emerging growth companies and has tremendous experience in building highly successful enterprises, from start-up to profitability. He has nurtured many successful global enterprises, having been involved in raising over $10 billion for all types of international commercial projects.
Over the last 15 years, he has focused his consulting efforts on reorganizing and financing early stage and micro-cap companies. This includes assisting companies to enter the international public markets specializing in North American and European listing venues, with over 200 public listings to his credit. He has a tremendous understanding of securities law, regulations, cross border settlement and capital formation. Mr. Csurgo specializes in OTC markets in Europe and North America , such as Frankfurt Stock Exchange, GXG Markets, AMEX, OTCBB, OTC Markets, CDNX,TXV Markets , and offshore centers such as Cayman Islands, Bermuda and Malta.
A Financial Executive with thirty years of broad business experience in building businesses and creating shareholder value. Mr. Figliolini's experience includes operational management, corporate finance, strategic acquisitions, business development, merchant banking and corporate restructuring From 1982 to 1992 Mr. Figliolini held various executive management positions at the Financial Institutions he worked for. These positions ranged from Stock Broker to Sales Manager to Financial & Operation Principal to Chief Financial Officer and ultimately to Chief Executive Officer. From 1992 to 2013 Mr. Figliolini Founded and Operated Berkshire International Finance, Inc. (New York and Ontario) a boutique Investment Banking Firm. At Berkshire International Finance, Inc. Mr. Figliolini assisted over 50 public and private companies in raising over US$500 Million in equity capital and taking companies Public via RTOs (reverse takeovers).
From 1994- 1998 Mr. Figliolini co-founded and advised three (3) Cayman Island registered mutual Funds (Offshore Venture Capital Funds) as well as one US registered Mutual Fund. One of the Offshore Funds was ranked #1 of all equity-oriented offshore funds for the fourth quarter 1994 by Lipper Analytical Services and continued to be a top performing fund as rated by Lipper through 1995. From 1998 to 2003 Mr Figliolini Founded and Operated an SEC registered broker/dealer (Phillip Louis Trading, Inc.) which made NASDAQ and OTC markets in 1,000 securities.