Archive for November, 2011

Monday, November 21, 2011 @ 01:11 PM
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FSE Listings: Why list on the Frankfurt Stock Exchange with FSE Listings and Issue Bonds versus working with Equity Placement firms, Equity Lines or Equity Capital Partners

Initially one needs to understand the cost to a company of taking shareholder equity. By committing to Equity Placement firms and or Equity Line holders shares of the firm, you are giving them a direct claim to your firms profits proportionate to their investment and holding of your firm. Therefore, you as a company need to consider:

The Real Cost Of Money – The cost of issuing shares is higher in the long-term than that of developing a debt instrument such as a bond. For example, the limitation of a Bond with a 10% yield, a shareholder is limitless based on a portion ownership of your firms growth. A Bond may be over 5 years, and the capital invested increases your capacity by 50%, so the funds in place are justifiable for the coupon payment of 10%. After 5 years, your firm earns all the profits of the decision made. With shares and shareholders, as long as there are shareholders, they have a right to the profits of the company ongoing. Often companies underestimate the real costs to gain the shareholders, which are in short the immediate and ongoing cost of legal, accounting, financial advisory, governance and corporate professionals such as brokers, bankers, and sponsors. In the current markets, these costs can absorb up to 50% of funds raised in an IPO, and sometimes they are costs that exceed the capital raised directly related to their services. Often, after the exercise of writing a prospectus and preparing your firm to raise capital, the capital raising in the private equity market depends on your ability to help raise money and pay attention to the shareholders and potential investors to gain the investment. The time consuming exercise deteriorates even some of the strongest businesses as the focus is on capital and not the company management and profitability during that timeframe. This is a high cost.

Loss of Control – The Company loses control to make decisions as it is required to consult with the shareholders of the Company. This is a difficult choice for entrepreneurs, and it is even more difficult when trying to set the today value of the dreams, aspirations, and blue sky of a firm to an investor. Often private equity involves losing more control than debt of the operations and decision making of a company.

Downward Pressure on the firm’s value – Go public and merger law related firms, or firms who offer equity lines of credit, convertible debentures, and private placement services at a discount of your share price create pressure on your stock and companies value. Especially the Bridge Loan programs for listing on the Frankfurt Stock Exchange, whereby they take their 5% of the shares and sell them into the market or at a discount to shareholders who liquidate based on emotion as they have no relationship with your firm and its success. Equity line firms strive on being issued shares for no upfront cash over a 15 day period or more so that they can sell shares into your market pushing down the stock value and bid so they can make more profit, of up to 50-90% in some cases. These PIPEs, Debt Financing, and special purpose private equity placements are toxic to companies who want to raise additional capital as their company value is driven down to pennies and control is ultimately diluted both in voting power and in their ability to raise and attract interest of capital. Beware of the equity partners and capital firms who offer Equity Lines, Private Placement, Bridge Capital, and Financing options prelisting of your firm. The most illiquid moment of a company is prelisting, and therefore, the owner of such a document actually has control of your firm before giving you a dime. The ability to apply pressure to anyone’s share price in our opinion is the ability to control someones firm. Bridge Loan (Sharks) and joker brokers who assist firms who do not have the 60k euro to list on the Frankfurt Stock Exchange prey on unsuspecting firms for their 5%+ of your deal and reputation to take advantage of your firm once it is listed. Don’t fall into the penny stock pump and dump scenario by avoiding these kinds of partners from the beginning. In addition, these firms may disguise their tactics by promising stock promotions of which you will be able to liquidate your shares and or your shareholders will be able to liquidate their shares into a vibrant market. We receive 5-10 phone calls per week from these types of stock promoter and bridge capital firms who are trying to sell their shares privately and exit the company. Their interest is not in your firm or your share price, its exiting their position. Be vigilant about who you choose as your partners, and before you choose anyone, get the advice of FSE Listings Inc as to their professional reputation by contacting www.fselistings.com.

Effects on the Balance Sheet and Financials

Dividends are paid from after-tax earnings, bond payments and interest payments are tax deductible. This affects the relative costs to the company of financing by issuing interest-based securities and financing through ordinary shares.

Everyone always thinks about listing a firm and raising private equity capital, however, public company shares are just the ability to offer shares and liquidate shares in a public arena. Thus, it gives a cash flow value to the shares of the company. Unlike private company shares that generally have no cash flow value. By listing your firm on the Frankfurt Stock Exchange, your shares have cash value to insurance firms and debtors, who will develop a corporate securitized bond collateralized by the cash flow and assets of the company.

The Benefits of the Bond and Frankfurt Listing:

  • No loss of control
  • Interest and Coupon Payments that are tax
    deductible, not from after tax earnings
  • Limiting the claim to the companies prosperity
    to rate of interest or coupon payments versus a shareholder claim of the
    profits (the true cost of money)
  • Access to the full amount of capital required
  • No downward pressure on your share value or
    market

If an investment in your firm could double capacity or greater over the next 5 years projections of your firm, you should be considering building a Bond and Frankfurt Listing with FSE Listings Robert Russell, Russell@fselistings.com. Contact us to see if you qualify by filling-out our documents and obtaining a
free pre-valuation of your firm!

Listing a firm on the Frankfurt Stock Exchange takes 3-6 weeks, qualifying for bond issuances takes 2-4 weeks, within 10 weeks you could be a listed and funded firm on the FSE! Don’t hesitate to contact the top listing firm for foreign firms outside of Germany like yourself!

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Tuesday, November 15, 2011 @ 02:11 PM
posted by admin

Finding an effective network or strategy of reaching high-net worth investors for exposure to your public company or private firm is often the largest challenge. The internet is one of the liberators to reaching this market and qualifying the eligibility of people prior to solicitation of any kind. Key aspects and components that have allowed up to several $100 million in placements globally:

  • Development of an Industry website and qualifying data sheet that meets the jurisdictional definitions of the
    “investor” who is allowed to make a placement in your firm  Supply of an industry report, information
    memorandum, and or summary on the business without direct solicitation, based on an opt-in of interest on your firm
  • Usage of Google Adwords, Facebook Ads, LinkedIn, Investor Networks, Private Growth, Angel Networks,
  • Investor Hubs, and other such networks to find High Networth Individuals (HNIs) Public relations exposure on an extensive global network for press releases, and appropriately placed contact details for filling in forms on the companies website or a script for investor relations or corporate representatives to pre-qualify those contacting the company
  • Investor Forums, Interviews, and Web Casts that drive potential shareholders to assert their interest in the industry and the firm
  • Access to newsletters and opt-in emails
  • Direct contact that encourages individuals to take initiative and qualify themselves through a web interface for receiving information and self-certifying their eligibility

Suppliers of reports have their own networks, thus, they often drive an additional following to your company.

Ensure your firm is always trying to collect data on all persons who contact the firm, regardless if they are an investor or not, qualifying them helps mitigate problems that could occur if unqualified individuals make an investment from talking to your public company or employees. Knowing they are certified increases your confidence as a company in what you share and can share as far as company information and opinions.  Knowing increases your ability to attract the investment!

If you would like to build a qualified investor database or develop an interest in your firm from sophisticated investors, you should be looking at the Online Qualified Investor marketing program and Social Media
Marketing campaign. The quality of the clients attracted to your firm, one lead could more than pay for the cost of a campaign!

Contact Cameron@FSElistings.com, Cameron Brady Frankfurt Stock Exchange Investor Relations!

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Wednesday, November 2, 2011 @ 03:11 PM
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Listing on the Frankfurt Stock Exchange and accessing financing through a Securitized Bond Offering

In order to securitized assets, they need to be cash flow producing. Public company shares are considered cash flow producing, in addition, a company’s sales revenue, mortgages, royalties, and payments being made to a company are ongoing cash flow, all which is insurable and bondable.  In today’s economy it is not enough just to insure cash flow, securitization generally requires the packaging and pooling of assets to achieve a higher rating acceptable to institutional markets in Europe. Thus, firms listed on the Frankfurt Stock Exchange can utilize their shares and assets pooled into a securitized bond for funding.

The process looks as such:

Frankfurt Listings Bond
Frankfurt Listings Bond

Frankfurt Stock Exchange Listings are vital for funding the company, without the listed shares, the institutions would not make the investment. The Bond requires both listed shares and the cash flows to give the additional security required to give a AA rating and guaranteed rate of return of 10%.

In addition to the financing required, the firm gains:

  • The notoriety of being a publicly listed company
  • The funds required to run their business successfully
  • Access to additional capital through the public markets
  • Entry into institutional investors without a costly Prospectus or IM
  • Real capital in 9-10 weeks, not Equity Lines and Pass-Through investments than never formulate

The Costs Involved With The Process

  • The company requires up-to-date financials
  • A third party valuation
  • A listing on the Frankfurt Stock Exchange
  • Due Diligence
  • The Insurance and Issuance from the Originator
  • Capital raised (Optional, as firms can often raise their own)

The cost of these items dictate the cost of the entire process to access up to 5 million euro in financing for your firm.

Companies are required to base their own expense third party valuations, commissions to brokers and the insurance firm, and auditors if required.

Why is this the number one way to finance a firm?

–          It takes on average 8-10 weeks

–          The company doesn’t dilute itself

–          The investment for investors is insured

–          All the required capital comes in a single tranche versus overtime

Contact info@fselistings.com or Robert Russell, Russell@fselistings.com to see if you qualify, and what the costs for your firm would be.

Don’t have a project to securitize yet? Don’t worry, list the company first so that you have half of the equation covered, it will make it easier to securitize if you have the ready made public company. Once you have the right target acquisition or revenue streams, create the Bond. This is also a very useful method for acquisition financing.

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