2. 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.
INVESTMENT
STRATEGY
Next: Investment Strategy, Page 2
3. Raising capital for small and medium size enterprises (SME’s) 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 SME’s, especially if you
take the traditional approach of an IPO (Initial Public Offering).
Next: Why Go Public?
4. THE ADVANTAGES
WHY GO PUBLIC
Next: Disadvantages of IPO
• Access
to
Capital
–
It
is
easier
to
raise
money
as
a
public
company
than
a
private
company.
Investors
are
more
comfortable
because
there
is
sufficient
informa8on
available
in
public
filings,
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.
5. DISADVANTAGES OF IPO
WHY GO PUBLIC
• IPOs
cost
are
very
high;
• An
IPO
from
start
to
finish
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
offering
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
offering
than
the
company
reasonably
needs,
crea8ng
greater
dilu8on
to
owners.
6. 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
9. • 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 company’s 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.
Next: Well Known Public Companies
10. 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
Next: Advantages of Reverse Mergers
11. ADVANTAGES OF REVERSE MERGER
Next: Financing the Company
• Lower
cost
than
IPO.
A
reverse
merger
usually
costs
significantly
less
than
an
IPO.
Most
reverse
mergers
can
be
completed
for
under
$500,000,
some
have
been
done
for
around
$200,000;
• Speedier
process
than
IPO.
Reverse
mergers
can
close
in
30
days
or
sooner
whereas
an
IPO
can
take
a
year
or
longer;
• Not
dependent
on
IPO
market
for
success;
• Not
suscep8ble
to
changes
from
underwriters
regarding
ini8al
stock
price;
• Less
8me-‐consuming
for
Company
Execu8ves;
• Less
Dilu8on;
• Underwriter
unnecessary;
12. FINANCING THE COMPANY
Next: Methods to Finance the Company After It Is Public
Most
reverse
mergers
are
undertaken
in
order
to
obtain
financing
for
a
growing
company.
Companies
effec8ng
reverse
mergers
usually
can
raise
somewhere
in
the
range
of
$3
Million
to
$50
Million,
although
in
the
case
of
the
Crea8ve
Capital
Ventures
Ltd.
financing
model
we
envisage
a
capital
raise
ceiling
of
$3
Million
for
each
project.
13. METHODS TO FINANCE THE
COMPANY AFTER IT IS PUBLIC
Next: Common Stock Pipes
• Common
Stock
PIPEs
(Private
Investment
in
Public
Equity);
• Conver8ble
Preferred
Stock
and
Conver8ble
Debt
(Structured
PIPE
deals).
Next: Common Stock Pipes
14. (Private Investment in Public Equity)
COMMON STOCK PIPES
• This
is
the
private
placement
of
registered
or
unregistered
shares
of
the
company’s
common
stock
to
investors.
These
shares
are
generally
placed
at
a
discount
to
the
prevailing
bid
price
of
the
company’s
stock;
• If
the
placement
is
of
unregistered
shares,
the
company
will
immediately
file
a
registra8on
statement
to
register
the
shares
so
that
they
are
free
trading
and
the
investor
can
liquidate
his
posi8on.
Next: Convertible Preferred Stock and Convertible Debt
15. CONVERTIBLE PREFERRED STOCK AND
CONVERTIBLE DEBT
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
significant
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
filed
and
the
investor
is
just
wai8ng
for
the
6
month
holding
period
to
expire;
(Structured PIPE deals)
16. • 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
filed
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
effec8ve
registra8on
statement
is
outstanding,
the
investor
can
“Structure”
his
conversion
terms;
17. • In
most
cases
the
Conver8ble
Preferred
or
Debt
instrument
will
probably
have
a
floa8ng
conversion
level,
subject
to
not
conver8ng
to
more
than
20%
of
the
company’s
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
18. EQUITY LINE OF CREDIT IS THE 3RD METHOD
OF RAISING CAPITAL
• As
far
as
the
Company
is
concerned,
this
is
the
most
flexible
method
of
raising
capital
because
the
company
will
draw
down
capital
when
and
if
needed
from
the
investor
who
provides
the
equity
line;
• There
are
limita8ons
on
all
equity
lines
based
on
the
company’s
stock
Volume
Weighted
Average
Price
(VWAP).
Generally,
a
company
can
pull
down
20%
of
the
average
weekly
dollar
trading
volume
and
it
is
done
so
at
a
discount
to
the
prevailing
bid
price;
19. Next: Developing Aftermarket Support And Liquidity
• 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).
20. DEVELOPING AFTERMARKET SUPPORT AND
LIQUIDITY
• AOen8on
to
the
role
of
Investor
Rela8ons
(IR)
in
promo8ng
and
suppor8ng
visibility
and
liquidity
is
part
of
an
integrated
approach
to
these
financing
alterna8ves;
• Without
stock
promo8on,
these
financing
op8ons
are
dead
in
the
water.
Next: Ways To Kick off a Successful IR
21. THERE ARE SEVERAL WAYS TO KICK OFF
A SUCCESSFUL IR
• Promo7onal
IR
–
Classic
promo8onal
techniques
include
arranging
“dog
and
pony
shows”
to
meet
with
large
groups
of
retail
brokers,
to
induce
them
and
their
customers
to
share
the
dream
of
the
company’s
future
success;
• Issuing
frequent
powerful
press
releases,
convincing
friendly
reporters
to
pen
CEO
profiles,
holding
press
conferences,
and
commissioning
“strong
buy”
research
reports;
• Ins7tu7onal
IR
–
Catering
to
“Sell
Side”
analysts;
22. • 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;
• Influen7al
financial
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
23. STRATEGY EMPLOYED BY
CREATIVE CAPITAL VENTURES LTD
The
professionals
at
Crea8ve
Capital
Ventures
Ltd.
have
many
years
of
experience
in
the
Interna8onal
Investment
Banking
community
in
the
area
of
deal
development,
deal
structure,
and
execu8on.
U8lizing
this
experience
they
will
take
the
first
step
toward
loca8ng
viable
private
companies
(“Target
Company”)
that
can
demonstrate
long
term
growth
poten8al
and
promise.
24. 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
file
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
off
debt.
25. • 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
file
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.
26. CREATIVE CAPITAL
VENTURES LTD.
Own 8% - 9%
Shares outstanding in Free
trading stock
LEGACY
SHAREHOLDERS
Own 1% - 2%
Shares outstanding in Free
trading stock
OPCO
SHAREHOLDERS
Own 85% - 90%
Shares outstanding in
Restricted Shares
SHELL COMPANY
27. • Once
the
Public
Company
becomes
the
Opera8ng
Company
(“OPCO”)
Crea7ve
Capital
Ventures
Ltd.
will
finance
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
effort
employed
by
the
IR/Promo
group
we
hired
at
the
close
of
the
Reverse
Merger
(Stock
promo8on
effort
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.
28. • Shares
underlying
the
Structured
PIPE
and/or
the
Equity
Line
will
be
sold
upon
effec8veness
of
Registra8on
statement
or
144
8me
period
lapses
(6
months).
The
conversion
level
of
the
Structured
PIPE
deal
is
floa8ng
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
float
of
each
RTO
completed
by
Crea7ve
Capital
Ventures
Ltd.
Next: Investing in Creative Capital Ventures Ltd.
30. Next: Investment Terms
Crea7ve
Capital
Ventures
Ltd.
is
an
offshore
registered
company,
with
one
hundred
percent
(100%)
of
its
common
shares
(vo8ng
shares)
owned
by
the
manager,
Euro
IPO
Services
Ltd
(BVI).
31. • 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
first
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
no8fica8on
for
Redemp8on
at
the
NAV
calcula8on
on
Payment
Date;
32. • 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
first
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
no8fica8on
for
Redemp8on
at
the
NAV
calcula8on
on
Payment
Date;
33. • 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.
• Banking
and
Custodian
Services:
Caledonian
Bank
Limited,
Cayman
Islands,
www.caledonian.com;
• Administrators,
Accountants
and
Advisors,
RRBB
Accountants,
www.rrbb.com
Next: Management Fees
34. 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
profit
on
actual
stock
sales
over
the
quarter,
less
2%
management
fee,
i.e.,
20%
share
of
realized
cash
profit
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
profit
on
actual
stock
sales
over
the
quarter,
less
2%
management
fee,
i.e.,
40%
share
of
realised
cash
profit
above
the
20%
High
Water
Mark).
Next: The Manager
35. 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.
36. 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.
37. John Figliolini, Managing Director
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).
38. 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.
39. Andrew Gaudet, Managing Director, Investment Sales
Mr. Gaudet has an extensive background in the financial services industry, going back more than
fifteen years. His expertise includes working in Europe, Asia, Latin America and the Caribbean where
his experience has included working with high-net-worth clients, investors and companies.
Mr. Gaudet’s professional experience has included being the Senior Vice President-Capital Markets
for Toronto and Bahamas based SG Corp., a corporate finance firm specializing in short term
lending. His experience with SGC included the responsibility of relationships with banks, lawyers and
financial partners as well as arranging syndicates for corporate finance projects.
In addition Mr. Gaudet was the Managing Director for Caribbean based Richmond Consultants,
which was a corporate consulting firm that created custom structures for development and
investment projects. His activities included serving as resident director for family and corporate
trusts, investment banking for private offerings and initial public offerings (IPOs) and the formation of
investment funds in the resource, real estate development and energy sectors.
