PART II OFFERING CIRCULAR
ACCELERA
INNOVATIONS FUND I, LLC
ASMX: ACCEL
Best Efforts Offering of 20,000 Secured Debt Notes
First Lien Position Secured by Corporate Assets/Accounts Receivables
This Offering Circular relates to the offer and sale of up to $20,000,000 in principal amount (the Offering) of Secured Debt Notes of ACCELERA INNOVATIONS FUND I, LLC, a Wyoming Limited Liability Company (the Company). The Companys principal office is located at 20511 Abbey Dr, Frankfort, IL 60423.
The Secured Debt Notes will be issued in the minimum amount of $1,000 and in multiples of $1,000. The Secured Debt Notes will be offered in maturities of 36 to 60 months from the date issued, with a fixed interest rate depending on the term. The Company will typically issue Secured Debt Notes on the same or next day, after deposit by the Company of the Subscribers payment check and the check is collected by the Companys Bank. See Description of Secured Debt Notes on Page 71 of this Registration Statement. The Interest Rate for each Secured Debt Note will be based on the formula set forth below and varies according to the term of the Secured Debt Note. See Description of Notes Principal, Maturity and Interest on Page 73 of this Registration Statement. The Minimum and the Maximum Fixed Interest Rates which are offered will change from time to time in response to changes in the current Wall Street Journals Prime Rate data obtained from the Wall Street Journal, or a similar credible source. The Prime Rate, as reported by the Wall Street Journals Bank Survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the Federal Funds Rate, which is set by the Federal Reserve. The Interest Rates for new Secured Debt Notes are set on the First Monday of each month at the start of business based on the Wall Street Journals Prime Rate on that day. Such rates are paid on all Secured Debt Notes issued between the start of business on that Monday and the close of business on the last day prior to the First Monday of the next month. The following table sets forth the formula for determining the Interest Rates for the Secured Debt Notes and the Initial Interest Rate based on the most recent Wall Street Journals Prime Rate as of SEPTEMBER 1st, 2015.
TERM | WALL STREET JOURNALS | INTEREST RATES AS OF |
36 MONTHS | Prime Plus 4.0% | 7.25% |
42 MONTHS | Prime Plus 4.5% | 7.75% |
48 MONTHS | Prime Plus 5.0% | 8.25% |
54 MONTHS | Prime Plus 5.5% | 8.75% |
60 MONTHS | Prime Plus 6.0% | 9.25% |
The Initial Rates set forth above will be effective only for Notes issued between SEPTEMBER 1st, 2015 and SEPTEMBER 30th, 2015. The Interest Rates fluctuate based on the formula set forth above, and to determine the current rates, prospective
Page 1 |
|
|
investors in the Notes should call the Company at (866-920-0758), or consult the web page: www.acceleraholding.com and/or the Companys Page on the Venture Market of the Alternative Securities Market Exchange at: http://www.AlternativeSecuritiesMarket.com and/or http://www.ASMX.CO.
The Company may prepay some or all of the Certificates at any time prior to their Maturity without premium or penalty.
The Company will pay Interest on Secured Debt Notes annually or at Maturity, at the Holders option. All Secured Debt Notes will be issued in fully registered form.
The Secured Debt Notes will NOT be subject to automatic rollover. Due to the fact automatic rollovers do not apply to the Secured Debt Notes, Investors will receive full payment of principal at Maturity.
The Company is offering the Secured Debt Notes directly to Investors through its Officers on a Minimum and Maximum Best Efforts Basis. The Secured Debt Notes will be issued at their principal face value, without a discount, and are not being sold through commissioned sales agents or underwriters. See Plan for Distribution on page 17 of this Registration Statement.
The Secured Debt Notes are being offered, and will be sold, pursuant to the exemption from registration provided by Section 3(b) of the Securities Act of 1933, as amended (the Act), and Regulation A promulgated thereunder. The Offering is contingent upon sales of a minimum of ONE THOUSAND SECURED DEBT NOTES ($1,000,000) to be sold in order for us to have access to the Offering proceeds. The Company may accept subscriptions as they are received after this minimum of Secured Debt Notes to be sold has been achieved and surpassed. The Offering will terminate upon the earlier to occur of (i) the date that is not more than one year after the Offering is qualified by the United States Securities and Exchange Commission (The Commission), and (ii) the date on which $20,000,000 of Secured Debt Notes qualified hereunder have been sold.
The Secured Debt Notes will not be listed on any exchange or quoted on any automated dealer quotation system. Currently, there is no public market for the Secured Debt Notes.
This Offering Circular shall not constitute an offer to sell or the solicitation to an offer to buy, nor shall there be any sales of these Secured Debt Notes in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of any such State.
THERE IS AT THIS TIME, NO PUBLIC MARKET FOR THE SECURED DEBT NOTES.
THESE SECURED DEBT NOTES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURED DEBT NOTES BEING OFFERED ARE EXEMPT FROM REGISTRATION. THE SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY NOTES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE.
THE SECURED DEBT NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE STATE SECURITIES LAWS, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THESE LAWS. THE SECURED DEBT NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AUTHORITY NOR HAS THE COMMISSION OR ANY STATE REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
GENERALLY NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGAGE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, THE COMPANY ENCOURAGES YOU TO REVIEW RULE 251 (d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, THE COMPANY ENCOURAGES YOU TO REFER TO WWW.INVESTOR.GOV
Page 2 |
|
|
THE COMPANY IS FOLLOWING THE OFFERING CIRCULAR FORMAT
OF DISCLOSURE UNDER REGULATION A
AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF A SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
Page 3 |
|
|
TABLE OF CONTENTS:
Item # | Description | Page # |
Item 2 | Distribution & Spread | 5 |
Item 3 | Summary Information & Risk Factors | 7 |
Item 4 | Dilution | 11 |
Item 5 | Plan for Distribution | 13 |
Item 6 | Use of Proceeds | 14 |
Item 7 | Description of Company | 16 |
Item 8 | Description of Property | 32 |
Item 9 | Managements Discussion and Analysis of Financial Condition and Results of Operation | 32 |
Item 10 | Directors, Executive Officers, and Significant Employees | 33 |
Item 11 | Executive Compensation | 37 |
Item 12 | Security Ownership of Certain Beneficial Owners and Management | 38 |
Item 13 | Interest of Management and Others in Certain Transactions | 40 |
Item 14 | Securities Being Offered | 40 |
Financial | Financial Statements Section | 48 |
Page 4 |
|
|
ITEM 2: DISTRIBUTION SPREAD
| Number of Notes Offered | Offering Price | Selling Commissions | Proceeds to Company |
Per Note | ------- | $1,000.00 | $50.00 | $950.00 |
Total Minimum | 1,000 | $1,000,000.00 | $100.00 | $900,000.00 |
Total Maximum | 20,000 | $20,000,000.00 | $1,000,000.00 | $19,000,000.00 |
1)
We are offering a maximum of 20,000 Secured Debt Notes at the price indicated
2)
Underwriter Expense paid to Alternative Securities Markets Group Corporation: $600,000 USD (3% of the Gross Offering)
3)
We expect to incur offering and registration expenses:
a.
California: $40,200
b.
New York: $1,200
c.
Texas: $20,100
d.
Florida: $1,000
4)
Additional Fees for Legal Review and Opinion(s), Accounting Costs related to the drafting of this Registration Statement and Escrow Fees should not exceed $25,000 USD. Any costs above $25,000 will be paid by the Managing Members of the Company.
5)
Until the Total Minimum has been raised (invested), all proceeds of the offering will be held in a bank escrow account until the Total Minimum has been reached. A copy of the Companys escrow agreement is provided as an Exhibit to this Registration Statement, and the Companys Bank Escrow complies with all Rules and Regulations set forth by SEC Rule 15c2-4.
6)
We do intend to use a Broker-Dealer for this Offering (5% Commission of the Offering Price).
THIS OFFERING CIRCULAR CONTAINS ALL OF THE REPRESENTATIONS BY THE COMPANY CONCERNING THIS OFFERING, AND NO PERSON SHALL MAKE DIFFERENT OR BROADER STATEMENTS THAN THOSE CONTAINED HEREIN. INVESTORS ARE CAUTIONED NOT TO RELY UPON ANY INFORMATION NOT EXPRESSLY SET FORTH IN THIS OFFERING CIRCULAR.
THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR SELLING LITERATURE. THESE SECURITIES ARE OFFERED UNDER AN EXEMPTION FROM REGISTRATION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THESE SECURITIES ARE EXEMPT FROM REGISTRATION.
INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOOSE THEIR ENTIRE INVESTMENT. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSURER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE BY THIS OFFERING CIRCULAR, NOR HAS ANY PERSON BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS OFFERING CIRCULAR, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICIATION WOULD BE UNLAWFUL OR ANY PERSON TO WHO IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICIATION. NEITHER THE DELIVERY OF THIS OFFERING CIRCULAR NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE AS HAS BEEN NO CHANGE IN THE AFFAIRS OF OUR COMPANY SINCE THE DATE HEREOF.
THIS OFFERING CIRCULAR MAY NOT BE REPRODUCED IN WHOLE OR IN PART. THE USE OF THIS OFFERING CIRCULAR FOR ANY PURPOSE OHER THAN AN INVESTMENT IN THE SECURED DEBT NOTES DESCRIBED HEREIN IS NOT AUTHORIZED AND IS PROHIBITED.
Page 5 |
|
|
THIS OFFERING IS SUBJECT TO WITHDRAWAL, CANCELLATION, OR MODIFICATION BY THE COMPANY AT ANY TIME AND WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART NOTWITHSTANDING TENDER OF PAYMENT OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE NUMBER OF SECURITIES SUBSCRIBED FOR BY SUCH INVESTOR.
THE OFFERING PRICE OF THE SECURED DEBT NOTES IN WHICH THIS OFFERING CIRCULAR RELATES HAS BEEN DETERMINED BY THE COMPANY AND DOES NOT NECESSARILY BEAR ANY SPECIFIC RELATION TO THE ASSETS, BOOK VALUE OR POTENTIAL EARNINGS OF THE COMPANY OR ANY OTHER RECOGNIZED CRITERIA OF VALUE.
NASAA UNIFORM LEGEND:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURED DEBT NOTES HAVE NOT BEEN RECOMMENDED BY THE FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURED DEBT NOTES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR ALL RESIDENTS OF ALL STATES:
THE SECURED DEBT NOTES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE INTERESTS ARE SUBJECT IN VARIOUS STATES TO RESTRICTION ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
Page 6 |
|
|
ITEM 3. SUMMARY INFORMATION & RISK FACTORS
Investing in the Companys Secured Debt Notes is very risky. You should be able to bear a complete loss of your investment. You should carefully consider the following factors, including those listed in this private securities offering.
There is Currently Little Public Information about the Companys Acquisition Targets
None of the Companys target acquisition companies are reporting companies under the Securities Exchange Act of 1934, and each does not file with the Securities and Exchange Commission annual or quarterly financial statements, and none are required to provide its stockholders with a proxy statement in compliance with Schedule 14A under the Securities Act of 1934. As a result, there may not be current information available to the Company, or to the public, upon which the Company, or investors of this Offering, may base decisions to buy or sell the Securities associated with this Offering.
The Company May Not have Sufficient Funds to Finance Any Proposed Acquisition Detailed in this Offering, and May Not Have the Funds Required In a Timely Manner to Finance, or to Exploit the Acquisition Opportunities Detailed in this Offering
The Company has very limited funds, and such funds may not be adequate to take advantage of the proposed business acquisitions detailed in this Offering. Even if the Companys funds prove to be sufficient to acquire any of the proposed acquisition targets detailed in this Offering, the Company may not have enough capital to exploit the opportunity. The Companys ultimate success may depend upon its ability to raise additional capital. The Company may not have investigated the availability, source, or terms that might govern the acquisition of additional capital and will not do so until it has determined a need for additional financing. If additional capital is needed, there is no assurance that funds will be available from any source or, if available, that they can be obtained on terms acceptable to the Company.
The Company May Never Close on a Business Acquisition, and if it does, the Acquired Company May Never Make a Profit
There is no assurance that the Company will acquire one of its targeted acquisition prospects. Even if the Company should acquire one of its acquisition targets, there is no assurance that it will ever generate revenues or profits, or that the market price of its common stock will be increased thereby.
The Company May Not have Performed an Exhaustive Investigation of its Proposed Initial Business Acquisitions, which May Increase the Risk that the Company may Lose all or a Part of its Ability to Make Timely Interest Payments, or to Repurchase any of its Secured Debt Notes
The Companys limited funds and its lack of full-time management may make it impracticable to have, or in the future to, conduct a complete and exhaustive investigation and analysts of a business opportunity before it agrees to commit, or commits capital, or other resources thereto. The Companys Management decisions, therefore, will likely be made, and may have been made, without detailed feasibility studies, independent analysis, market surveys and the like which, if the Company had more funds available to it, would be desirable. The Company will be particularly dependent in making decisions upon information provided by the promoter, owner, sponsor, or others associated with the targeted acquisition. A significant portion of the Companys available funds may be expended for investigative expenses and other expenses related to aspects of completing its proposed acquisition(s) transaction(s), whether or not any business acquisition investigation is eventually acquired.
The Company Engages in Leveraged Buyout Transactions which May Increase Investor Exposure to Larger Losses, Make it More Difficult to Make a Profit, and Possibly Result in the Loss of All or a Part of an Investors Investment in the Company
The Company acquires its targets through Leveraged Buyouts, meaning the Company finances the acquisition of its businesses by borrowing against the assets of the acquisition business target to be acquired, or against the projected future revenues or profits of the business opportunity. This could increase or expose the Company to larger losses. A business acquired through a leveraged transaction is profitable only if it generates enough revenues to cover the related debt and expenses. Failure to make payments on the debt incurred to purchase the business opportunity could result in the loss of a portion or all of the assets acquired. There is no assurance that any business opportunity acquired through a leveraged transaction will generate sufficient revenues to cover the related debt and expenses.
Page 7 |
|
|
The Company may Lose One, or All of its Targeted Acquisition Businesses due to the Fact that the Company has Limited Resources and May Not be able to Compete with Other Firms for the same Targeted Business Acquisition Targets.
The search for potentially profitable business opportunities is intensely competitive. The Company may be at a disadvantage when competing with many firms that have substantially greater financial and management resources and capabilities than the Company. These competitive conditions will exist in any industry in which the Company chooses to operate.
Development Stage Business
ACCELERA INNOVATIONS FUND I, LLC Commenced operations in June of 2015. The Company was formed as a Wyoming Limited Liability Company. Accordingly, the Company has only a limited history upon which an evaluation of its prospects and future performance can be made. The Companys proposed operations are subject to all business risks associated with new enterprises. The likelihood of the Companys success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There is a possibility that the Company could sustain losses in the future. There can be no assurances that ACCELERA INNOVATIONS FUND I, LLC will operate profitably.
Inadequacy of Funds
Gross offering proceeds of a maximum of $20,000,000 may be realized. Management believes that such proceeds will capitalize and sustain the Company sufficiently to allow for the implementation of the Companys Business Plans. If only a fraction of this Offering is sold, or if certain assumptions contained in Managements business plans prove to be incorrect, the Company may have inadequate funds to fully develop its business.
Although the Company believes that the proceeds from this Offering will be sufficient to help sustain operations during the complete development and build-out of this project, there is no guarantee that the Company will raise all the funds needed to adequately fund development Operations. The Company has determined that $1,000,000, in addition to traditional bank financing and cash flow from sales operations, will be needed to fund planned operations for the first twelve months, though the construction timeline for the completion of the entire development may be much greater.
Dependence on Management
In the early stages of development the Companys business will be significantly dependent on the Companys management team. The Companys success will be particularly dependent upon: NGT Holdings LLC, the Companys Managing Member, Mrs. Cynthia Boerum, the Companys Sr. Executive and Managing Member, Mr. Patrick Custardo, the Companys Development Manager and Managing Member, and on the Companys external management team of Alternative Securities Markets Group Corporation.
Minimum Amount of Capital to be Raised
The minimum amount of Secured Debt Notes that need to be sold in this offering for the Company to access the investment funds is $1,000,000. All Secured Debt Note Proceeds will be administered by Alternative Securities Markets Group Corporation. The proceeds of the Secured Debt Notes will remain in an account maintained by Alternative Securities Market, LLC for the benefit of for the benefit of ACCELERA INNOVATIONS FUND I, LLC until disbursed pursuant to the terms and conditions of this Registration Statement. If the Offering terminates before the offering minimum is achieved, or if any prospective Investors subscription is rejected, all funds received from such Investors will be returned without interest or deduction. The Companys ability to meet financial obligations, cash needs, and to achieve objectives, could be adversely affected if the entire offering of Secured Debt Notes is not fully subscribed.
Control by Management
As of September 1st, 2015, ACCELERA INNOVATIONS HOLDINGS LLC owned 100% of the Companys outstanding Equity Membership Units. Upon completion of this Offering, ACCELERA INNOVATIONS HOLDINGS LLC will own 100% of the issued and outstanding Equity Membership Units. Investors will not have the ability to control either a vote of the Companys Managers or any appointed officers. See COMPANY MANAGERS section.
Page 8 |
|
|
The Companys Continuing as a Going Concern Depends Upon Financing
If the Company does not raise sufficient working capital and continues to experience pre-operating losses, there will most likely be substantial doubt as to its ability to continue as a going concern. Because the Company has generated no revenue, all expenditures during the development stage have been recorded as pre-operating losses. Revenue operations have not commenced because the Company has not raised the necessary capital.
Broker - Dealer Sales of Units
The Companys Membership Units and Secured Debt Notes are not included for trading on any exchange, and there can be no assurances that the Company will ultimately be registered on any exchange. The NASDAQ Stock Market, Inc. has recently enacted certain changes to the entry and maintenance criteria for listing eligibility on the NASDAQ SmallCap Market. The entry standards require at least $4 million in net tangible assets or $750,000 net income in two of the last three years. The proposed entry standards would also require a public float of at least 1 million shares, $5 million value of public float, a minimum bid price of $2.00 per share, at least three market makers, and at least 300 shareholders. The maintenance standards (as opposed to entry standards) require at least $2 million in net tangible assets or $500,000 in net income in two of the last three years, a public float of at least 500,000 shares, a $1 million market value of public float, a minimum bid price of $1.00 per share, at least two market makers, and at least 300 shareholders.
No assurance can be given that the Company will ever convert to a Stock Corporation and No assurances can be given that the Companys Stock Units would ever qualify for inclusion on the NASDAQ System or any other trading market until such time as the Managing Members deem it necessary. As a result, the Companys Secured Debt Notes are covered by a Securities and Exchange Commission rule that opposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and qualified investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchasers written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell the Companys securities and will also affect the ability of members to sell their units in the secondary market.
Secondary Market
No application is currently being prepared for the Company's Securities to be admitted to the Official Listing and trading on any regulated market. No application is being prepared to include the Securities to trading on an "Over-the-Counter" or "Open Market. There can be no assurance that a liquid market for the Securities will develop or, if it does develop, that it will continue. If a market does develop, it may not be liquid. Therefore, investors may not be able to sell their Securities easily or at prices that will provide them with yield comparable to similar investments that have a developed secondary market. Illiquidity may have a severely adverse effect on the market value of the Securities and investors wishing to sell the Securities might therefore suffer losses.
Unavailability of Rule 144 for Resales
The Company may be regarded under Rule 12b-2 of the Securities Exchange Act of 1934 as a shell company. Noteholders who hold Secured Debt Notes of the Company which are not subject to a registration statement under the Securities Act often rely upon Rule 144 for their resale. Rule 144 is not available for the resale of Secured Debt Notes initially issued by either reporting or non-reporting shell companies (other than a business combination related shell company) or an issuer that has been, at any time previously, a reporting or non-reporting shell company, unless the issuer meets specified conditions. A security holder may resell securities pursuant to Rule 144s Safe Harbor if the following conditions are met:
1)
The Issuer of Securities that was formerly a reporting or non-reporting company has ceased to be a shell;
2)
The Issuer of the Securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
3)
The Issuer of the Securities has filed all reports and material required to be filed under Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
4)
At least one year has elapsed from the time the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
The Company May Exercise its Right of Repurchase with Regard to the Secured Debt Notes
The Operating Agreement allows for the Company to exercise a right of repurchase, in its sole discretion, with regard to the Secured Debt Notes at any time. While the Company will be entitled to exercise this right of repurchase, it has not made any determination to exercise this right of repurchase as of the date hereof, and does not intend to exercise the right of repurchase.
Page 9 |
|
|
Long Term Nature of Investment
An investment in the Companys Secured Debt Notes may be long term and illiquid. As discussed above, the offer and sale of the Secured Debt Notes will not be registered under the Securities Act or any foreign or state securities laws by reason of exemptions from such registration, which depends in part on the investment intent of the investors. Prospective investors will be required to represent in writing that they are purchasing the Secured Debt Notes for their own account for long-term investment and not with a view towards resale or distribution. Accordingly, purchasers of Secured Debt Notes must be willing and able to bear the economic risk of their investment for an indefinite period of time. It is likely that investors will not be able to liquidate their investment in the event of an emergency.
Compliance with Securities Laws
The Companys Secured Debt Notes are being offered for sale in reliance upon certain exemptions from the registration requirements of the Securities Act, applicable Wyoming Securities Laws, and other applicable state securities laws. If the sale of Notes were to fail to qualify for these exemptions, purchasers may seek rescission of their purchases of Secured Debt Notes. If a number of purchasers were to obtain rescission, we would face significant financial demands, which could adversely affect the Company as a whole, as well as any non-rescinding purchasers.
Offering Price
The price of the Secured Debt Notes offered has been arbitrarily established by our current Managers, considering such matters as the state of the Companys business development and the general condition of the industry in which it operates. The Offering price bears little relationship to the assets, net worth, or any other objective criteria.
NOTICE REGARDING THE TRUST INDENTURE ACT OF 1939
THE TRUST INDENTURE ACT OF 1939 SUPPLEMENTS THE SECURITIES ACT OF 1933 IN THE CASE OF DISTRIBUTION OF DEBT SECURITIES IN THE UNITED STATES. THE TRUST INDENTURE ACT (TIA) REQUIRES THE APPOINTMENT OF A SUITABLY INDEPENDENT AND QUALIFIED TRUSTEE TO ACT FOR THE BENEFIT OF THE HOLDERS OF THE SECURITIES, AND SPECIFIES VARIOUS SUBSTANTIVE PROVISIONS FOR THE TRUST INDENTURE THAT MUST BE ENTERED INTO BY THE TRUSTEE. THE TIA IS ADMINISTED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. INVESTORS OF THIS OFFERING WILL NOT BENEFIT FROM A TRUSTEE, INDENTURE, OR THE PROTECTIONS AFFORDED BY THE TRUST INDENTURE ACT OF 1939.
NOTICE REGARDING AGREEMENT TO ARBITRATE
THIS OFFERING MEMORANDUM REQUIRES THAT ALL INVESTORS ARBITRATE ANY DISPUTE ARISING OUT OF THEIR INVESTMENT IN THE COMPANY. ALL INVESTORS FURTHER AGREE THAT THE ARBITRATION WILL BE BINDING AND HELD IN THE STATE OF WYOMING, IN THE COUNTY OF LARAMIE. EACH INVESTOR ALSO AGREES TO WAIVE ANY RIGHTS TO A JUR TRIAL. OUT OF STATE ARBITRATION MAY FORCE AN INVESTOR TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. OUT OF STATE ARBITRATION MAY ALSO COST AN INVESTOR MORE TO ARBITRATE A SETTLEMENT OF A DISPUTE.
Page 10 |
|
|
ITEM 4. DILUTION
An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their sweat equity into the company. When the company seeks cash from outside investors, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of the new investors stake is diluted because each share of the same type is worth the same amount, and the new investor has paid more for the shares than earlier investors did for theirs.
The Company was formed as a Wyoming Limited Liability Company in June of 2015. Since its formation, the Company has issued ONE THOUSAND (1,000) Equity Membership Units as illustrated below:
The following provides the names and addresses of each of the ACCELERA INNOVATIONS FUND I, LLC. affiliates who own 5% or more of any class of our Equity Membership Units:
| Name and Address of Record Owner | Membership Units of Record Owned upon Qualification of this Registration Statement | Membership Units of Record Owned upon Completion of this Offering | |
| ACCELERA INNOVATIONS HOLDINGS LLC. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) | 1,000 Equity Membership Units / 100% of the Issued Equity Membership Units | 1,000 Equity Membership Units / 100% of the Issued Equity Membership Units | |
(1) Mrs. Cindy Boerum is a Managing Member of Accelera Innovations Holdings, LLC. | ||||
(2) Mrs. Cindy Boerum current owns 26% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings, LLC. | ||||
(3) Mrs. Cindy Boerums Address: ACCELERA INNOVATIONS INC. 20511 Abbey Dr, Frankfort, IL 60423 | ||||
(4) Mr. Patrick Custardo is the Managing Member of Accelera Innovations Holdings, LLC. | ||||
(5) Mr. Patrick Custardo current owns 26% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings, LLC. | ||||
(6) Mr. Patrick Custardos Address: ACCELERA INNOVATIONS INC. 20511 Abbey Dr, Frankfort, IL 60423 | ||||
(7) NGT Holdings LLC is a Managing Member of Accelera Innovations Holdings LLC and currently owns 33% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings LLC | ||||
(8) NGT Holdings LLC Address: Accelera Innovations Inc. 20511 Abbey Dr. Frankfort IL 60423 | ||||
(9) Geoffrey and Nancy Thompson are the controlling members of NGT Holdings LLC and are currently the controlling membership interest holders of the Company, and Geoffrey Thompson and Nancy Thompson have joint membership voting power's of all Equity Membership Units owned by NGT Holdings LLC. | ||||
(10) GeniusCapital Global Mergers & Acquisitions Group LLC owns 5% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings, LLC. | ||||
(11) Address: GeniusCapital Global Mergers & Acquisitions Group LLC, 500 Office Center Drive, Suite 400, Fort Washington, Pennsylvania 19034 | ||||
| ||||
(12) Mr. Craig Atkins is the Managing Member of GeniusCapital Global Mergers & Acquisitions Group LLC, and is currently the controlling membership interest holders of the Company, and Mr. Craig Atkins has sole voting powers of all Equity Membership Units owned by GeniusCapital Global Mergers & Acquisitions Group LLC. (13) Alternative Securities Markets Group Corporation is a Managing Member of Accelera Innovations Holdings, LLC. and owns 10% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings, LLC. Mr. Weslie W. Johnson is the Chief Executive Officer of Alternative Securities Markets Group Corporation, and owns 30% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. Mr. Rich Moniak is the Chief Operations Officer of Alternative Securities Markets Group Corporation and owns 30% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. Mr. Steven J. Muehler is the Chief Financial Officer and Senior Compliance Officer of Alternative Securities Markets Group Corporation and owns 30% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. Mr. Koorosh Rahimi is the President of Asset Management for Alternative Securities Markets Group Corporation and owns 5% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. Mr. David Dobkin is the President of Investment Banking for Alternative Securities Markets Group Corporation and owns 5% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. (14) Address: Alternative Securities Markets Group Corporation, 4136 Del Rey Avenue, Marina Del Rey, California 90292 |
Future Dilution
The Company, for business purposes, may from time to time issue additional equity membership units, which may result in dilution of existing shareholders. Dilution is a reduction in the percentage of equity membership units caused by the issuance of new equity membership units. Dilution can also occur when holders of options (such as company employees) or holders of other optionable securities exercise their options. When the number of equity membership units outstanding increases, each existing shareholder will own a smaller, or diluted, percentage of the Company, making each share less valuable. Dilution may also reduce the value of existing equity membership units by reducing the units earnings per share. There is no guarantee that dilution of the equity membership units will not occur in the future.
Page 12 |
|
|
ITEM 5. PLAN OF DISTRIBUTION
This Offering Circular relates to the offering (the Offering) of up to 20,000 Secured Debt Notes of ACCELERA INNOVATIONS FUND I, LLC. The Secured Debt Notes offered through this Offering have no voting rights and are not convertible to equity membership units of the Company. The Offering will commence promptly after the date of this Offering Circular and will close upon the earlier of (1) the sale of 20,000 Secured Debt Notes, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Companys Managing Member (the Offering Period). The Company will have 180 days to reach an investment minimum of $1,000,000. If the Offering terminates before the offering minimum is achieved, or if any prospective Investors subscription is rejected, all funds received from such Investors will be returned without interest or deduction.
A minimum of $1,000,000 must be invested prior to the Company having access to the Investment Proceeds. A maximum of $20,000,000 will be received from the offering. No Securities are being offered by any selling shareholders. The Company will receive all proceeds from the sale of Securities after the minimum of $1,000,000 has been reached. If the Offering terminates before the offering minimum is achieved, or if any prospective Investors subscription is rejected, all funds received from such Investors will be Promptly Refunded without interest or deduction.
The Securities to be offered with this proposed offering shall be offered by the Companys Broker Dealer, Alternative Securities Market, LLC, and by Executive Members of the Company, Messers, Mrs. Cindy Boerum & Mr. Patrick Custardo, through a web-based platform called the Alternative Securities Market Exchange or the ASMX. The Alternative Securities Markets Group Corporation is the Owner and Operator of the ASMX, and the terms of its operations can be found in the Exhibits of this Registration Statement. The ASMX can be accessed at: http://www.ASMX.CO, http://www.AlternativeSecuritiesMarket.com and/or http://www.ASMGCorp.com.
This Offering Circular will be furnished to prospective Investors upon their request via electronic PDF format and will be available for viewing and download 24 hours per day, 7 days per week on the website.
In order to subscribe to purchase the Secured Debt Notes, a prospective Investor must complete, sign and deliver the executed Subscription Agreement, Investor Questionnaire and Form W-9 to ACCELERA INNOVATIONS FUND I, LLC. And wire funds for its subscription amount in accordance with the instructions included in the Subscription Package.
The Investing Section of the Website Hosting this Offering will be coded to only allow access to invest to those prospective Investors that reside in jurisdictions where the Offering is registered and meet any state-specific Investor suitability standards.
The Company reserves the right to reject any Investors subscription in whole or in part for any reason. If the Offering terminates or if any prospective Investors subscription is rejected, all funds received from such Investors will be returned without interest or deduction.
In addition to this Offering Circular, subject to limitations imposed by applicable securities laws, we expect to use additional advertising, sales and other promotional materials in connection with this Offering. These materials may include public advertisements and audio-visual materials, in each case only as authorized by the Company. Although these materials will not contain information in conflict with the information provided by this Offering and will be prepared with a view to presenting a balanced discussion of risk and reward with respect to the Secured Debt Notes, these materials will not give a complete understanding of this Offering, the Company or the Secured Debt Notes and are not to be considered part of this Offering Circular. This Offering is made only by means of this Offering Circular and prospective Investors must read and rely on the information provided in this Offering Circular in connection with their decision to invest in the Secured Debt Notes.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
Page 13 |
|
|
ITEM 6. USE OF PROCEEDS TO ISSUER
The Company seeks to raise maximum gross proceeds of $20,000,000 from the sale of Units in this Offering. The Company intends to apply these proceeds substantially as set forth herein, subject only to reallocation by Company Management in the best interests of the Company.
A.
Sale of Company Five Year Secured Debt Notes
Category | Maximum Proceeds | Percentage of Total Proceeds | Minimum Proceeds | Percentage of Proceeds |
Proceeds from Sale of Notes | $18,312,500 | 91.50% | $900,000 | 90% |
B.
Offering Expenses
Category | Maximum Proceeds | Percentage of Total Proceeds | Minimum Proceeds | Percentage of Proceeds |
Offering Expenses | $1,687,500 | 8.50% | $100,000 | 10% |
|
|
|
|
|
|
|
|
|
|
Footnotes:
1)
We are offering a maximum of 20,000 Secured Debt Notes at the price indicated
2)
Underwriter Expense paid to Alternative Securities Markets Group Corporation: $600,000 USD (3% of the Gross Offering)
3)
We expect to incur offering and registration expenses:
a.
California: $40,200 (Paid out of Minimum)
b.
New York: $1,200 (Paid out of Minimum)
c.
Texas: $20,100
d.
Florida: $1,000 (Paid out of Minimum)
4)
Additional Fees for Legal Review and Opinion(s), Accounting Costs related to the drafting of this Registration Statement and Escrow Fees should not exceed $25,000 USD. Any costs above $25,000 will be paid by the Managing Member of the Company. (Paid out of Minimum)
5)
Until the Total Minimum has been raised (invested), all proceeds of the offering will be held in a bank escrow account until the Total Minimum has been reached. A copy of the Companys escrow agreement is provided as an Exhibit to this Registration Statement, and the Companys Bank Escrow complies with all Rules and Regulations set forth by SEC Rule 15c2-4.
6)
We intend to use Alternative Securities Market, LLC as the Broker-Dealer for this Offering (5% of Offering).
Page 14 |
|
|
USE OF INVESTMENT FUNDS (MAXIMUM):
Advance LifeCare Home Health (Stock Sale)
$500,000
Behavioral Health Care Associates (Stock Sale)
$4,550,000
Grace Home Health (Stock Sale)
$5,250,000
Traditions Home Health (Stock Sale)
$6,000,000
Watson Home Health (Asset Sale)
$3,000,000
Cost of Offering
$1,687,500
TOTAL
$20,987,500
________________________________________________________________________________________________________
USE OF INVESTMENT FUNDS (MINIMUM):
Advance LifeCare Home Health, Inc. Acquisition | $500,000 |
Cost of Offering | $100,000 |
Operations & Growth Capital | $400,000 |
|
|
Total | $1,000,000 |
____________________________________________________________________________________________________
Page 15 |
|
|
ITEM 7. DESCRIPTION OF COMPANY & ASSETS
L.
EXECUTIVE SUMMARY
ACCELERA INNOVATIONS, INC was founded in April 2008 and is leading the post-acute care industry around the globe; our principle office is in Frankfort, Illinois.
OUR MISSION:
Our mission is to improve patient outcomes and lower costs, through educating providers, leveraging our technology and changing the model of payment to a value-based system.
BUSINESS SERVICE:
There are two categories to the Accelera business: Post-Acute Care acquisitions, a collaboration of companies designed to improve the outcomes of post-acute care patients and Information Technology Services.
Post-Acute Care Acquisitions:
Accelera completed one acquisition in 2013, Behavioral Health, with revenue of $3.1 million and an EBITDA of $1.2 million. In October 2014, Accelera completed the acquisition of SCI (Advance LifeCare Home Health); SCIs revenue is $920,728 with an EBITDA of $132,530. The two acquisitions in Chicago offer personal care to approximately 10,000 patients each year, and partner with 15 hospitals and 1200 physicians in the Chicago area.
Accelera continued to grow in 2014, executed under contract two additional home health agencies outside of Illinois; Grace Home Health operating in Long Beach California with revenue of $4.6 million and an EBITDA of $1.2 million and Watson Home Health operating in Ann Arbor Michigan with revenue of $4.9 million and an EBITDA of $722,000.
In January 2015, Accelera executed a contract with Traditions Home Health operating in McAlester, OK with revenue of $6.2 million and an EBITDA of $1.5 million.
Information Technology Services:
Accelera has assembled through licensing, solutions that address the current market needs of connecting the patient to relevant health data to ensure positive health outcomes. This is accomplished through a product line that provides cloud-based technology, which is ahead of the curve while providing mobility, interoperability, and rapid deployment capabilities in a scalable, secure, and 100% web-based platform.
THE MARKET: WHY POST-ACUTE CARE
Post-acute care is a critical part of healthcare reform in the US as more people with multiple illnesses are moved through the various parts of our healthcare system with suboptimal care and high cost overruns as a result.
Each year nearly nine million people-24,000 per day are discharged from short term acute care hospitals and require some form of post-acute care. Patients typically see a range of providers and specialists promoting communication problems and other errors resulting in higher costs.
These problems result in a substantial number of hospital re-admissions. According to Medpac, among Medicare patients- 20% are re-hospitalized within 90 days. More than 75% of these re-admits (at a cost of more than $26 billion per year) are thought to be avoidable.
Page 16 |
|
|
In an attempt to address this large expense Medicare started in October 2012, penalizing hospitals with high readmission rates. The penalties were up to 3% in 2014.
The industry is motivated to address the lack of coordination in post-acute care.
Medicare spending on post-acute care is estimated to be $63.5 billion market.
COMPETITION:
Accelera competes directly with large Home Health agencies, Rehabilitation Services, Behavioral Health and Long Term Care. Our strategy is unique because we understand the inability of post-acute care services to exchange information as the patient utilizes each service entity, therefore creating poor outcomes for the patient.
ORGANIZATIONAL STRUCTURE:
Accelera has a management team at the corporate level with experience in M&A; operational efficiencies; building distribution channels and general management. Several of the members have had experience in health care, primarily in M&A, sales and provider operations. The Accelera Board of Directors includes several outside Board Members who have operational experience with health care services companies.
OPERATIONS:
The day to day management of the acquired companies is retained through a Management Service Organization model; this allows the existing management to continue to run the business and provides the Accelera management with a focus on M&A and integration.
CAPITAL RAISE:
Accelera is seeking in the first round $20 million, this will be in debt and no equity. This will enable Accelera to complete the payments of the existing acquisitions, ($19,250,000) and provide in the second round enough capital of $5,750,000 for future acquisitions.
FINANCIAL STABILITY:
In November of 2012, Accelera was granted Effective Status by the Securities and Exchange Commission (SEC). The Company has moved to trading on the OTCQB under the ticker ACNV, the bid/ask is $2.00-$2.50.
KEYS TO SUCCESS:
·
Acquiring health care Providers or groups with strong revenue and positive EBITDA of 10% to 20% of annual revenue.
·
Decreasing the expenses and increasing revenue within our acquisitions by utilizing our technology applications and platforms.
·
Becoming more involved in Telemedicine including acquisitions and using our cloud-based Health Information Exchange.
·
Influence the delivery of health care globally.
Page 17 |
|
|
Accelera believes that the decisive difference between success and mediocrity is our ability to transform global reach into real value for our customers (patients), value that our competitors do not provide. Now, more than ever, with the grasp of our technology and the baby boomer patient population fast approaching old age, our leadership in the acquisition and national presence in providing the very best post-acute care services will benefit patients, and investors.
COMPANY OBJECTIVES
The principal purposes of this offering are to obtain additional capital, to create a public market for our common stock, facilitate future access to public equity markets, increase awareness of our company among potential customers, expand into new metropolitan markets, broaden our scope of care, and acquire companies to increase our annual revenue. In addition, we reserve the right to change the use of proceeds as a result of the occurrence of certain contingencies or opportunities, as they may present themselves, such as the acceleration of our expansion beyond our current plans, the opportunity to acquire equipment, technologies or businesses on favorable terms, to conduct additional marketing and sales activities, and other activities we deem advantageous to our business. We believe that the net proceeds from this offering, our existing cash resources and interest on these funds will be sufficient to meet our projected operating requirements.
COMPANY MISSION
Our mission is to improve patient outcomes and lower costs, through educating providers, leveraging our technology and changing the model of payment to a value-based system.
The company now provides the highest quality care in the home, spanning every age group and level of care from pediatrics to geriatrics, to critical care or just being there. Our team of home health care professionals now includes nurses, physical therapists, occupational therapists, speech language pathologists, medical social workers, and home health aides.
Accelera will provide the infrastructure and products that will enable participants in the healthcare arena; physicians, clinicians, health plans, and researchers/scientists to share information easily and collaborate across the entire patient care continuum. The end result is healthcare professionals beginning to leverage digitalized health data to help them manage patient populations; reducing costs and improving patient care and patient safety.
3.3 COMPANY LOCATIONS AND PREMISES
We were incorporated in the State of Delaware on April 29, 2008, and established a December fiscal year end. Our corporate headquarters is located at 20511 Abbey Drive, Frankfort, Illinois 60423.
ACQUISISTION LOCATIONS:
·
Behavioral Health Care- 1375 E. Schaumburg Rd. Ste 230 Schaumburg, IL 60194
·
SCI Home Health Inc (Advance LifeCare) 1800 Nation Drive Ste 216 Gurnee, IL 60031
·
Grace Home Health Care 1739 Termino Ave Long Beach, CA 90804
·
Watson Home Health Care Inc 27755 Carpenter Rd Ste 3 NW Anne Arbor, MI 48197
·
Traditions Home Care Inc 100 S 3rd St. McAlester, OK 74501
|
|
|
|
|
|
MARKET COMPETITION
Home Health Competitors:
Home health care companies offer a wide range of skilled medical services such as nursing care, physical therapy and occupational therapy from qualified medical professionals in addition to various services from home health aides. Other home care companies might offer assistance with daily activities, such as bathing and eating. Home care services are conducted in the comfort of your home. There is a directory of 12,300 Medicare-certified home health agencies and 21,452 other home care companies in the United States.
COMPETITIVE EDGE
Accelera's mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. Our nursing and rehabilitation therapists provide a full range of medical and social services to treat and support each and every one of our patient. And Rehabilitation provides intensive rehabilitative care to help people return to their lives with as much independence as possible.
THE VALUE OF POST-ACUTE CARE:
The most common hospital setting in America is one that provides short-term acute care for patients with pressing health issues emergencies or surgeries brought on by illness or an accident. The immediate objective is to stabilize the patient and begin the recovery process.
For many of these patients, however, a quick recovery is unrealistic. They need continued care post-acute care. At Accelera, we continue the care for our patients or residents in sites of service across the post-acute spectrum. Our expertise across this spectrum allows us to achieve our goal of helping patients recover to the fullest by providing care in the proper care setting.
The company provides post-acute care through:
·
Our rehabilitation services business, which helps patients get their lives back by providing physical and occupational therapy and speech-language pathology.
·
Home health care, which offers medical services, including wound care and rehabilitation therapy, provided in the comfort of your home, wherever you live.
·
Hospice, a family-oriented model of care designed to meet the spiritual, emotional and physical needs of patients in lifes final season.
The American Hospital Association developed a report that discusses the value of post-acute care in the healthcare continuum and explores how post-acute care providers can serve as important partners both for acute-care hospitals and for one another in improving quality and reducing costs over an episode of care. According to the report, partnerships across settings not only benefit patients transitioning to a post-acute site, but can also benefit general acute-care hospitals referring to and receiving referrals from post-acute care. As a provider of post-acute care services, Accelera Innovations is well positioned to work with other healthcare services providers.
Page 19 |
|
|
INTELLECTUAL PROPERTY & TECHNOLOGY
The Accelera applications are currently written using Microsoft .Net and C# and are all integrated solutions. All Accelera applications are being rewritten and developed in a true 100% J2EE framework. This platform allows Accelera tools and applications to run in both, internet web and cloud environments. The Accelera Architecture is designed on an object-oriented rapid application framework that provides fluid and scalable systems with a rapid, interoperable deployment method.
The Accelera methodology for applications is simple. Start on a proven, scalable platform. Develop tools that make the applications able to stay fluid, interoperable, ahead of the curve on technology and enable the end user to stay close to the development process. Then continue to create the ability for applications to be tested, modified, and enhanced without major redeployments.
MARKET ANALYSIS SUMMARY
Hospitals traditionally have viewed a patient's discharge as the endpoint of their care responsibilities. Little attention was paid to the next steps in treatment once the patient left the building. Movie scenes showing miraculously cured patients waving cheerful good-byes to their hospital caretakers are, however, a Hollywood invention.
In reality, hospital stays frequently are just one step in ongoing episodes of care. Ensuring a smooth transition from acute to post-acute and long-term care settings is critical to achieving optimal health outcomes, as well as preventing unnecessary hospital readmissions and emergency department visits.
Numerous forces from the exploding growth in the 65+ population to increasing penalties for hospital readmissions are converging to make acute care providers focus on what happens to patients post-discharge. Both payers and acute care providers are taking notice of the critical role PAC and LTC services play in ensuring the continuity and quality of care. Skilled nursing facilities, home care, inpatient rehabilitation facilities and long-term acute care hospitals are key to addressing the complexities of patients who are elderly, chronically ill or struggling with behavioral health issues.
These patients historically have been served in unmanaged fee-for-service delivery systems. The Affordable Care Act, however, is driving fresh opportunities to improve quality and contain costs for these populations through new value-based purchasing arrangements.
Innovative payment models including bundled purchasing (paying for episodes of care across multiple settings) and global payments incentivize quality, cost efficiency and care coordination. Clearly, the time is right for real change and real progress in the PAC and LTC arena.
WHATS DRIVING THE CHANGE IN PAC AND LTC?
1.
A dramatically changing population
According to the Congressional Budget Office, by 2050, 20% of the U.S. population will be 65 or older. One study estimates that more than two-thirds of 65-year-olds will need assistance to deal with impaired functioning during their remaining years. Adding to the soaring demand for LTC and PAC services is the growth in younger patients with chronic and disabling conditions.
To be prepared, PAC and LTC providers must develop:
·
New treatment models that address chronic disease management, as well as integrated or coordinated care at the provider level across physical health, behavioral health and social support needs, including access to affordable housing.
·
New staffing models that are person-centered and interdisciplinary. Care teams should include not only primary care or specialty physicians but also care managers, nutritionists, patient navigators and
Page 20 |
|
|
family members. It's also important to include non-traditional providers, such as peer counselors and community health workers, to supplement nurses, home health aides and personal care attendants.
·
New training curricula to ensure all providers and care managers are trained in emerging care coordination and management models that support patients with chronic and co-morbid conditions. Both traditional and non-traditional providers and care managers must be trained in care management goals, effective interventions for specific populations, and Information Technology (IT) systems and analytic tools for managing patient care.
2.
Increased payer and policymaker attention on spending, quality and outcomes
Medicare and Medicaid are focused on reducing hospital readmissions and variations in spending and margins across PAC and LTC settings, as well as ensuring appropriate service utilization. Overall, we have significant opportunities to improve care and limit costs for populations with chronic conditions. Forces driving change include:
·
Financial penalties for hospitals and, soon, for SNFs and other PAC providers -- for avoidable hospital readmissions.
·
A shift to value-based (versus volume-based) payments and a commitment to population-health management to improve quality and control costs.
·
Increased capitated managed care arrangements for elderly and disabled populations. To stay in network, PAC and LTC providers must demonstrate quality and cost effectiveness.
·
A focus on standardized health and functional assessments to ensure patients are placed in the lowest-cost facility that meets their needs.
·
A rise in quality measurement and reporting. PAC and LTC providers must develop metrics to assess their resultsand implement needed improvements.
3.
The integration of large health systems with PAC providers
Facing financial penalties for readmissions, health systems are increasingly looking to partner with PAC providers. Three-quarters of hospitals subject to Medicare's Hospital Readmissions Reduction Program are being penalized for 30-day hospital readmissions with Medicare estimating fines totaling $428 million over the year. That amount of money is a strong motivator for hospitals and health systems to find ways of partnering with PAC providers to lower readmission rates. There are several potential integration paths:
·
Clinical integration. Seeking to increase hospital throughput, ease transitions across care settings and prevent readmissions, hospitals and health systems are developing screening criteria to identify high-need, high-cost populations who would benefit from care management/care coordination and referrals to PAC settings. To support improved care management and coordination, hospitals are investing in data analytics and information technology systems, including building integrated or interoperable electronic medical records (EMRs); sharing physician staff across acute and PAC settings; and developing effective treatment, transition and follow-up plans for patients and their families.
·
Structural integration. Health systems are creating care systems that manage treatment across the care continuum. Called continuing care networks or integrated delivery systems, these systems might own PAC assets or work with them through affiliated partnerships.
·
Financial integration. Hospitals and PACs are testing approaches for sharing financial risk and benefiting from mutual savings through emerging payment models that pay for episodes of care across multiple settings.
Acute, PAC and LTC providers have always informally worked together. Now they are joining forces to ensure seamless care transitions, enhance quality and improve outcomes, while protecting their own financial futures.
Page 21 |
|
|
In this new environment, acute care providers must recognize the importance of PAC and LTC providers in supporting patients post dischargeand lowering readmission rates and emergency room usage. PAC and LTC providers also must realize their own critical role in the care continuum, and adapt administratively, clinically, structurally and financially to the rapidly changing healthcare landscape.
STRATEGY
Accelera, a global company, has several opportunities at the LOI stage, each valued between $2 and $100 million.
Accelera will work to align communication protocols so acute and post-acute care providers can communicate as seamlessly as possible. These protocols guide providers in discussing patient status, particularly when a patients condition changes. Clear channels of communication, a common approach for discussing patients and the information technology infrastructure to exchange clinical information are helping reduce readmissions and emergency department visits. Referring or attending providers feel more comfortable providing clinical guidance to PAC staff instead of requesting that the patient be sent to the emergency room. Currently statistical data for Electronic Health Record payments is $4.5 billion in federal incentives and payments are still increasing in the first quarter of 2013 according to CMS; with still another 15 billion to be paid out prior to 2015.
As policy changes place more accountability for the selection of the most appropriate PAC setting on referring providers, it will be increasingly important to support these providers in making the best choices for patients. As a first step, referring providers need more information on available PAC options and data indicating the unique clinical capacities and quality outcomes for PAC providers in the community. Once an individual patient has been admitted to the appropriate PAC setting, acute-care clinicians need access to complete patient data that can be shared across settings, including from the PAC setting back to the referring provider. Many of these data-sharing goals require a robust health information technology infrastructure that some facilities are just beginning to build. A Common Assessment Tool Could Help Providers Make the Best Decisions for Patients Policymakers and providers agree on the need for a single assessment tool that uses common data metrics for all PAC settings. A uniform tool could not only help providers and patients work together to select the most appropriate PAC setting and encourage efficient data sharing among providers, but also could improve data analysis. Currently, each PAC setting has its own methods and tools for admitting and discharging.
Our patient management solution has entered into a boom market; the US market value for this patient management solution is $7.1 billion, with annual growth averaging about 25 percent and a $22.2 billion market by 2015.
The health care business intelligence market is starting to take off, but even in an increasingly crowded marketplace theres plenty of green fields for both enterprise and focused software, according to KLAS Enterprises. Fifty-six percent of organizations surveyed say they are moving to an enterprise strategy for BI use, and many report doing so because theyre tired of having internal arguments about data. From an executive perspective, they feel there are all kinds of data silos. This is a critical juncture for organizations; sixty-four percent say they planned to become an ACO (Accountable care organization) within the next three years. This will require a significant ramp-up of business/clinical analyses and reporting.
Page 22 |
|
|
ACQUISITION TARGET ONE: ADVANCE LIFECARE HOME HEALTH:
·
Purchase Price: $500,000 USD
·
Location: 3590 Hobson Road, Suite 402, Woodridge, Illinois 60517
Advance Lifecare Home Health is a strong seven year company and is 100% Medicare Certified. Advance Lifecare is engaged in the business of providing home health care services. The programs offered are Speech Therapy, Occupational Therapy, Physical Therapy, Skilled Nursing by Registered Nurses, Medical Social Workers, Rehabilitation Services, Home Health Aides and providing Medical Supplies and Equipment.
The Company, SCI Home Health, Inc. was founded in May of 2007, the name Advance Lifecare Home Health became a DBA in 2009. In September of 2009, the Medicare Certification was achieved and the business of finding a strong manager, growing the business and providing quality home health services became a reality.
In 2011, Mr. Jimmy Lacaba, a computer engineer with years of experience as a Medical Billing Encoder and an experienced Home Health Administrator was hired, as the Chief Operating Officer. Mr. Lacaba has increased the company revenues by 30% over the past three years and positioned the company for success.
Today, Advance Lifecares annual revenue exceeds $1 Million USD and the revenue is expected to grow substantially.
MANAGEMENT STRATEGY:
Operating Agreement by and among Advance Life Management, LLC and Advance Lifecare Home Health, LLC
Page 23 |
|
|
ACQUISITION TARGET TWO: BEHAVIORAL HEALTH CARE ASSOCIATES:
·
Purchase Price: $4,550,000 USD
·
Location: 1375 East Schaumburg Road, Suite 230, Schaumburg, Illinois 60194
Behavioral Health Care Associates (BHCA) is a strong 20 year old Company providing counseling and treatment to patients with substance abuse issues, eating disorders as well as other mental health problems such as depressing. The company does clinical trials for pharmaceutical companies at an increasing level.
BHCA is in a market corridor that lends well to increasing patient populations. The main office is in Cook County with a close connection to DuPage County. By providing clinical trials for large and reputable pharmaceutical companies, BHCA enjoys a very strong referral base for patient growth.
MANAGEMENT STRATEGY:
Operating Agreement by and among Accelera Healthcare Management Service Organization LLC, Blaise J. Wolfrum, MD and Behavioral Health Care.
Employment Agreement by and between Accelera Innovations, Inc. and Blaise J. Wolfrum, CEO
Page 24 |
|
|
Current Revenue through April 2014 (Advance Lifecare Home Health and Behavorial Health Care Associates):
December Year End | Actual 2013 | Actual 2014 | Projected 2015 |
Revenue | $4.1M | $4.5M | $5M |
EBITDA | $1.3M | $2.0M | $2.5M |
|
|
|
|
Page 25 |
|
|
ACQUISITION TARGET THREE: WATSON HEALTH CARE, INC:
·
Purchase Price: $3,000,000 USD
·
Location: 11750 Highland Road, Suite 600, Hartland, Michigan 48353
Watson Health Care, Inc. (1991) and Affordable Nursing, Inc. are two companies in Michigan with one sole owner. Watson Health Care is a case management provider and becomes a feeder system for Home Health and post-acute care entities. Affordable Nursing provides professional medical staffing since 1998.
MANAGEMENT STRATEGY:
Asset purchase by Accelera Innovations Fund I, LLC, retaining all management except the owner.
Page 26 |
|
|
ACQUISITION TARGET FOUR: GRACE HOME HEALTH, INC:
·
Purchase Price: $3,000,000 USD
·
Location: 1739 Termino Avenue, Long Beach, California 90804
Grace Home Health Care was established in 1995. The Agency is a Medicare / Medi-Cal certified home health care establishment, and is accredited by Community Health Accreditation Program (CHAP).
The Companys employs professionals of diverse disciplines who are committed to providing the best service possible to the people they serve.
The mission of Grace Home Health Care is to provide quality, integrated and cost-effective home health services to individuals and their families regardless of age, sex, creed, disability or illness in cooperation with their physicians. The agency also stands on the belief that human life is a physical, psychosocial and spiritual integrated being. Man is created to live in harmonious relationship with God, himself and others including his environment. The agency seeks to minister to the total needs of this man, our patient, in order to achieve health, self-reliance and wholeness.
SERVICES:
·
Skilled Nursing Services
·
Home Health Aide
·
Social Services
·
Dieticians
·
Enterostomal Consulting
·
Therapy Services
Page 27 |
|
|
ACQUISITION TARGET FIVE: TRADITIONS HOME CARE, INC:
·
Purchase Price: $,000,000 USD
·
Location: 100 South 3rd Street, McAlester, Oklahoma 74501
·
Five Branch Office Locations throughout Oklahoma
Traditions Home Care began in the 1908s with a full blooded Choctaw woman who was known as the Indian Doctor. The establishment Traditions Home Care, Inc. was formed in 2002. The Company offerings skilled nursing services, certified home health aides and both physical and occupational therapy.
MANAGEMENT STRATEGY:
A stock purchase agreement between Traditions and Accelera Innovations Fund I, LLC is in place, and all management will remain in current positions.
SERVICES:
·
Skilled Nurshing
·
Certified Home Health Aide
·
Physical & Occupational Therapy
·
Psychiatric Nursing
Page 28 |
|
|
Current Revenue through April 2014 (Watson Health Care, Grace Home Health and Traditions Home Care Associates):
Description | Grace | Traditions | Watson |
2013 Revenues | $4.8M | $6.6M | $4.9M |
2013 EBITDA | $1.2M | $1.5M | $0.772M |
2014 Revenues | $5.1M | $6.8M | $5.1M |
2014 EBITDA | $1.3M | $1.7M | $0.85 |
Page 29 |
|
|
TERMS AND CONDITIONS
The following is a summary of the certain principal terms of the proposed investment in ACCELERA INNOVATIONS FUND I, LLC
The Company | ACCELERA INNOVATIONS FUND I, LLC is a Wyoming Limited Liability Company.
|
Security Offered | The Company shall hold a Senior Lien on all the acquired companies as defined in this Registration Statement. |
Company Managers | Biographies of all Managers can be found starting on Page 64 of this Offering. |
|
|
Minimum Capital Commitment | Each investor will be required to purchase a minimum of One - Secured Debt Note Units. |
The Offering | The Company is seeking capital commitments of $20,000,000 from Investors. The securities being offered hereby consists of up to 20,000 Secured Debt Notes of the Company, priced at $1,000.00 per Secured Debt Note. The purchase price for each of the Secured Debt Notes is to be paid in cash as called by the Company. |
Interest Distributions | Interest shall be paid to the Investors Quarterly. Interest due for all Notes shall be paid on the following dates each year: · Last Business Day of March each year · Last Business Day of June each year · Last Business Day of September each year · Last Business Day of December each year |
Principal Repayment Early Repurchase of Notes by the Company Voting Rights Ranking Term of the Offering | All Principal shall be paid to the Investor at Maturity (Five Years). All Secured Debt Notes repurchased by the Company in Months 1-12 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional six months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 13-24 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase plus, an additional five months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 25-36 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional four months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 37-48 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional three months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 49-54 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional two months of interest. No fractional Secured Debt Notes shall be repurchased. All Secured Debt Notes repurchased by the Company in Months 55-59 shall be repurchased for the full Face Value, all accrued interest due up to the date of repurchase, plus an additional one month of interest. No fractional Secured Debt Notes shall be repurchased. Secured Debt Noteholders have NO VOTING RIGHTS The Secured Debt Notes will be the Companys Secured Obligations and will: · Rank Superior with all future secured indebtedness (no current secured indebtedness); · Rank Superior with all existing and future unsecured indebtedness; · Be Superior to all of the Companys (including any future subsidiaries) existing and future secured obligations to the extent of the value of the assets securing such obligations; and · Be Superior to all future indebtedness (no current indebtedness) and other liabilities of any future subsidiaries. The Offering will commence promptly after the date of this Offering Circular and will close (terminate) upon the earlier of (1) the sale of 20,000 Secured Debt Note Units, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Companys Management (the Offering Period). the Company has set an investment minimum of $1,000,000 USD before the Company will have access to the Investment Proceeds, which means all investment dollars invested in the Company prior to reaching the minimum of $1,000,000 will be held in an investment escrow account, and only after $1,000,000 in securities has been sold to investors (One Thousand Secured Debt Note Units) will the Company have access to the Investment Proceeds. If the Offering terminates before the offering minimum is achieved, or if any prospective Investors subscription is rejected, all funds received from such Investors will be returned without interest or deduction. |
Advancement of Secured Debt Note Proceeds Valuations | The Secured Debt Note proceeds will be administered by Alternative Securities Markets Group Corporation, and held in a Business Escrow Account established by Alternative Securities Market, LLC. The proceeds of the Secured Debt Notes (less any fees and expenses as detailed in this Registration Statement) will remain in an account maintained at Alternative Securities Market, LLC in the name of Alternative Securities Market, LLC for the benefit of Accelera Innovations Fund I, LLC until disbursed pursuant to the terms of this Registration Statement. Alternative Securities Markets Group Corporation will typically direct Alternative Securities Market, LLC to disburse amounts to the Company from time-to-time as acquisition or operations advances. Alternative Securities Markets Group Corporation, for advances of $50,000 or more, will direct Alternative Securities Market, LLC to advance the funds direct from the established escrow account direct to the receiver. Alternative Securities Markets Group Corporation will not be permitted to direct Alternative Securities Market, LLC to make any disbursements to the Company if the Company is in the arrears on its annual interest payments to more than 15% of its Secured Debt Noteholders without a vote of no less than 75% of the Companys Secured Debt Noteholders. Alternative Securities Markets Group Corporation shall not be permitted to direct Alternative Securities Market, LLC to make any disbursements of Investor Funds that differs from the Stated Use of Funds Schedule by more than 5% with a favorable vote of more than 75% of the Secured Debt Noteholders. The Company Managers will, at least once per year, perform an internal valuation of the Companys assets, using accepted valuation techniques (including, but not limited to: corporate acquisitions appraisals, Cost Analysis, Sales Comparisons, and/or Income Capitalization Approaches), to establish the fair market value of each asset as the end of such year. The fair market value of the assets will be deemed to be the ownership interest in each asset valued at. In addition, detailed financial modeling will be performed using current market assumptions and discounted cash flow analysis. The Company Managers will, at least once per year, perform an internal valuation of the Companys assets, using accepted valuation techniques, to establish the fair market value of each asset as the end of such year. The fair market value of the assets will be deemed to be the ownership interest in each asset valued at the current capitalization rate for each market. In addition, detailed financial modeling will be performed using current market assumptions and discounted cash flow analysis. |
Indemnification | The Company will indemnify, defend and hold the Company Managers, the members of the Board of Directors harmless from and against any losses, damages, costs that relate to the operations of the Company, unless the Company Manager(s) acted in an unethical manner related to directing investments. |
ITEM 8. DESCRIPTION OF PROPERTY.
The Company does not own any real estate. The Company currently rents office spaces at 20511 Abbey Dr, Frankfort, IL 60423. The Company will hold a First Lien Position on each corporate acquisition through accounts receivables.
ITEM 9. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
The following discussion and analysis of the Companys Financial Condition and results of operations should be read in conjunction with the Companys consolidated financial statements. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The Companys actual results and timing may differ from those anticipated in these forward-looking statements and planning as a result of many factors, including those discussed under Risk Factors and elsewhere in the prospectus.
The Company is a Developmental Stage Company with limited operating history:
ACCELERA INNOVATIONS FUND I, LLC Commenced operations in June of 2015. The Company was formed as a Wyoming Limited Liability Company. Accordingly, the Company has only a limited history upon which an evaluation of its prospects and future performance can be made. The Companys proposed operations are subject to all business risks associated with new enterprises. The likelihood of the Companys success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There is a possibility
Page 32 |
|
|
that the Company could sustain losses in the future. There can be no assurances that ACCELERA INNOVATIONS FUND I, LLC will operate profitably.
Overview:
The Company remains in the development stage and has limited capital resources and shareholders equity. At September 1st, 2015, the Company has in the form of cash and cash equivalents $1,000 USD, total assets of $0.00, and total liabilities of $0.00. The cash assets may not satisfy cash requirements for the company within the next three months. In the event additional cash is required, the Company may have to borrow funds from shareholders or other sources, or seek funds from a private placement among new investors, none of which can be assured. The Company cannot predict to what extent its limited capital resources will impair the consummation of a business or whether it will incur further operating losses through any business entity which the Company may eventually acquire.
For the remainder of the current year, the Company anticipates incurring a loss as a result of legal and accounting expenses, expenses associated with registration of this Regulation A+ Securities Offering in multiples States, and expenses associated with further evaluation of the Companys proposed acquisition businesses. The Company anticipates that until a business acquisition is completed, it will not generate revenues other than interest income, and may continue to operate at a loss after completing a business acquisition, depending upon the performance of the acquired business.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
(a) Directors and Executive Officers.
A. Directors and Executive Officers. The current officer and director will serve for one year or until his respective successor(s) are elected and qualified.
·
Cindy Boerum - Sr. Executive and Managing Member
·
Patrick Custardo - Development Manager and Managing Member
NGT Holdings LLC is a Managing Member of Accelera Innovations Holdings LLC and currently owns 33% of the Issued and Outstanding Equity Membership Units
Geoffrey and Nancy Thompson are the controlling members of NGT Holdings LLC and are currently the controlling membership interest holders of the Company, and Geoffrey Thompson and Nancy Thompson have joint membership voting power's of all Equity Membership Units owned by NGT Holdings LLC.
Cindy Boerum - Sr. Executive and Managing Member
Ms. Boerum became the Sr. Executive and Managing Member of the Company in June 2015, prior to joining the Company; Ms Boerum was Vice President of Sales and Consultant for Accentia International Outsourcing Company in Hyberdad, India, from 2009 to 2011. The leadership included national and international sales teams. Previously, Ms Boerum held positions of Vice President of Sales for Opus Healthcare in Austin, TX. 2004 to 2007 and positioned the company for acquisition by NextGen. She also held the positions of Enterprise Vice President of National Accounts and Sales Manager for the top 32 health organizations nationally at McKesson from 1989 to 2003. During this time she received various top performer awards, not only from McKesson, but also the state of Minnesota. Ms. Boerum received her clinical experience at Shady Grove Adventist Hospital, in Maryland, from 1979 to 1989. Ms Boerum graduated the ADN program at Frederick Community College in Maryland.
Patrick Custardo - Development Manager and Managing Member
Mr Custardo became the Chief Acquisition Officer of the Company in 2013, prior to joining the Company, Mr. Custardo was owner of Global Medserv, Inc, a Revenue Cycle Management company that he grew to include consulting and credentialing medical practices, from 2005 to 2013. Previously, Mr Custardo founded and led
Page 33 |
|
|
Sentry Financial Corporation through mergers and acquisitions, all the while turning the startups into multimillion dollar revenue companies, from 1981-2004. He also held the position of Sr. Vice President Mergers and Acquisitions at NorCon Capital Funds, Inc, from 1978 to 1981. Mr Custardo received his B.S. from Illinois State University and his J.D. from Lewis University College of Law in 1978.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
Page 34 |
|
|
EXTERNAL MANAGEMENT TEAM ALTERNATIVE SECURITIES MARKETS GROUP CORPORATION (ASMG)
Mr. Wes Jonson
Chief Executive Officer of ASMG
Age: 60
Mr. Wes W. Johnson grew up in a heavy construction family, frequently moving with the family throughout California and Arizona to various road, bridge and dam job sites. It was very important to his father to keep the family together while traveling to the many job sites, thereby instilling in Mr. Johnson a very family orientated lifestyle.
Mr. Johnson attended high school in Arroyo Grande, California and attended college at Cal Poly, San Luis Obispo, California studying animal science and business. After college, Mr. Johnson entered the family construction business and received his California General Building Contractors License, later adding a General Engineering Contractors License. Mr. Johnson built numerous projects in San Luis Obispo and Santa Barbara Counties, including single family homes, multi-family housing projects, commercial retail and industrial properties, schools and medical buildings. The next step was investing in real estate development projects in California and numerous other States.
After a move to Austin, Texas, Mr. Johnson became involved in developing and building Single Family Residents and Multi-Family projects as well as land development and multi-family investments. While in Texas, Mr. Johnson was introduced to the Texas Oil Business through a real estate associate and began investing in oil production and re-work projects. As one point, Mr. Johnson was working on an acquisition of several abandoned wells in Oklahoma when oil prices went down to $12-$15 per barrel. The oil holdings were liquidated.
After a few years of passively observing the oil industry, Mr. Johnson began searching for the right opportunity in the Oil Industry. Two years later, after looking in Texas, Oklahoma, Ohio and Kansas, the oil project in Pennsylvania was presented and deemed to be a great opportunity. The project is in a proven oil field with existing production from several major oil companies and a proven drilling and operating company with whom the Company can partner. Mr. Johnson formed Remington Energy Group Corporation and proceeded to acquire the lease to develop 100+ oil wells in the Northwest part of Pennsylvania.
Mr. Johnson lives with his Wife in Incline Village, Nevada on the shore of beautiful Lake Tahoe. He has a daughter and her family in San Diego, California and a Son and his family residing in Portland, Oregon.
Mr. Johnsons Employment History includes being the Owner, Managing Member and President of the companies listed below:
·
Pinnacle Financial Services, LLC
Five Years
·
Remington Energy Group Corp
One Year
Mr. Johnson is the founder and CEO of Remington Energy Group Corporation as well as being Chairman of the Board. His experience in negotiating real estate transactions has and will be valuable in negotiating the leases and drilling sites. With Mr. Johnsons experience and oil contacts, the company will greatly benefit in locating the best drilling areas and his construction knowledge will be helpful in locating sites that have great access. Familiarity in all aspects of getting a site ready to drill, running utilities to the site, and actual drilling is brought to the company through Mr. Johnson. Actively managing previous companies will ensure expert leadership for the corporation.
Mr. Johnson joined Alternative Securities Markets Group Corporation as Chief Executive Officer in June of 2015.
Mr. David Dobkin
President of Investment Banking
Age:36
David Dobkin, is the President of Investment Banking for Alternative Securities Markets Group Corporation.
David has been working with the New Zealand government regarding investment attraction over the last 4 years years in various capacities in Auckland, Dubai and the US. (2010 - Current)
Prior to joining ASMG, David was a the the Regional Investment Director for the New Zealand government based in Dubai. David opened the Dubai investment office to better align New Zealand with Middle East investment with the goal of securing strategic foreign direct investment.
Prior to arriving in Dubai, David Dobkin ran the Emirates Team New Zealand Americas Cup Investment leveraging activities in San Francisco, culminating in an investor showcase for Silicon Valley venture capital and private equity investors. He has been
Page 35 |
|
|
instrumental in securing investment for New Zealand companies in the Healthcare, High Value Manufacturing, Aerospace and ICT sectors, including establishing the $40mm Valar Early Stage Fund, run by Peter Thiel and Proliants $100mm Bovine Plasma greenfield investment.
Prior to working for New Zealand in October 2010, David worked for Lazard Frères, one of the world's preeminent financial advisory and asset management firms, where he facilitated and advised on cross-border mergers and acquisitions transactions in excess of $3 billion for Nike, Lockheed Martin, Quiksilver, Wynn Resorts, Morgans Hotels, Arrow International, CBS, Cryocore, Gyrocam Systems and others. David was also an investment banker in the Healthcare group for Wasserstein Perella in New York. He has founded, advised and led several start-up companies, including Aegix Performance Apparel, revitaPOP and DealProvider.com. David received a Master of Science, Biomedical Engineering, from the University of Southern California and Bachelor of Science, Biomedical Engineering, from Columbia University.
Mr. Koorosh Rahimi
President of Asset Management
Age: 56
In July of 2015, Mr. Koorosh Rahimi joined Alternative Securities Markets Group Corporation as the Firms President of Asset Management. Mr. Rahimi is responsible for the day-to-day operations of the Firms Investment Advisory and Broker Dealer Operations. Licenses: Series 7, Series 66, Series 6, Series 31, Series 63, Real Estate and Life Insurance.
Mr. Rahimi started his career in Investment Banking in March of 2009 as a Financial Advisor & Registered Investment Advisor with MassMutual Financial Group, where he provided High Net Worth Clients Financial Advice on matters such as: Investments, Retirement Planning and Estate Planning.
In mid 2011, Mr. Rahimi advanced his career path in the Financial Services Industry by joining Wells Fargo as a Licensed Banker. For just over two and one half years, Mr. Rahimi provided clients with an array of solutions to Wells Fargo Bank customers, from FDIC Insured products, business banking products and services, merchant services and Financial Advisor services.
In early 2013, Mr. Rahimi joined Bank of Americas Merrill Edge, where he served as Assistant Vice President of Investments and Preferred Banking. Mr. Rahimis primary function was Financial Planning & Retirement Planning, Financial Advice for: Investments, Financial Securities, Stocks, Bonds, and Mutual Funds.
B. Significant Employees. All Members of ACCELERA INNOVATIONS FUND I, LLC as listed above are each considered "Significant Employees", and are each "Executive Officers" of the Company. The Company would be materially adversely affected if it were to lose the services of any member of ACCELERA INNOVATIONS FUND I, LLC listed above as each he has provided significant leadership and direction to the Company.
C. Family Relationships. None
D. Involvement in Certain Legal Proceedings. None
There have been no other events under any bankruptcy act, any criminal proceedings and any judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past three years.
E. Legal proceedings. There are not presently any material pending legal proceedings to which the Registrant is a party or as to which any of its corporate acquisitions is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
Page 36 |
|
|
ITEM 11. EXECUTIVE COMPENSATION.
In September of 2015, the Company adopted a compensation program for Company Management. Accordingly, Management of ACCELERA INNOVATIONS FUND I, LLC. will be entitled to receive an annual salary of:
Mrs. Cynthia Boerum
Sr. Executive Manager & Managing Member
$1.00
Mr. Patrick Custardo
Development Manager& Managing Member
$1.00
NGT Holdings LLC
Managing Member
$1.00
Alternative Securities Markets Group
Managing Member
$1.00
Officer Compensation
The Company does not currently pay any cash fees to any Officer of the Company beyond those listed above.
Directors and Advisors Compensation
The Company does not currently pay any cash fees to any Director or Advisor of the Company or any member or employee of the Company beyond those listed above.
Significant Employees
The Company has no significant employees other than the Company Managers named in this prospectus.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
Page 37 |
|
|
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security ownership of certain beneficial owners.
The following table sets forth, as of the date of this Registration Statement, the number of Equity Membership Units owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Equity Membership Units of the Company. Also included are the shares held by all executive officers and directors as a group.
The Company was formed as a Wyoming Limited Liability Company in June of 2015. Since its formation, the Company has issued ONE THOUSAND (1,000) Equity Membership Units as illustrated below:
:
| Name and Address of Record Owner | Membership Units of Record Owned | % of Membership Units of Record Owned | |
| ACCELERA INNOVATIONS HOLDINGS LLC. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) | LLC Equity Membership Units | 100% | |
(1) Mrs. Cindy Boerum is a Managing Member of Accelera Innovations Holdings, LLC. | ||||
(2) Mrs. Cindy Boerum current owns 26% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings, LLC. | ||||
(3) Mrs. Cindy Boerums Address: ACCELERA INNOVATIONS INC. 20511 Abbey Dr, Frankfort, IL 60423 | ||||
(4) Mr. Patrick Custardo is the Managing Member of Accelera Innovations Holdings, LLC. | ||||
(5) Mr. Patrick Custardo current owns 26% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings, LLC. | ||||
(6) Mr. Patrick Custardos Address: ACCELERA INNOVATIONS INC. 20511 Abbey Dr, Frankfort, IL 60423 | ||||
(7) NGT Holdings LLC is a Managing Member of Accelera Innovations Holdings LLC and currently owns 33% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings LLC | ||||
(8) NGT Holdings LLC Address: Accelera Innovations Inc. 20511 Abbey Dr. Frankfort IL 60423 | ||||
(9) Geoffrey and Nancy Thompson are the controlling members of NGT Holdings LLC and are currently the controlling membership interest holders of the Company, and Geoffrey Thompson and Nancy Thompson have joint membership voting power's of all Equity Membership Units owned by NGT Holdings LLC. | ||||
(10) GeniusCapital Global Mergers & Acquisitions Group LLC owns 5% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings, LLC. | ||||
(11) Address: GeniusCapital Global Mergers & Acquisitions Group LLC, 500 Office Center Drive, Suite 400, Fort Washington, Pennsylvania 19034 | ||||
| ||||
(12) Mr. Craig Atkins is the Managing Member of GeniusCapital Global Mergers & Acquisitions Group LLC, and is currently the controlling membership interest holders of the Company, and Mr. Craig Atkins has sole voting powers of all Equity Membership Units owned by GeniusCapital Global Mergers & Acquisitions Group LLC. (13) Alternative Securities Markets Group Corporation is a Managing Member of Accelera Innovations Holdings, LLC. and owns 10% of the Issued and Outstanding Equity Membership Units of Accelera Innovations Holdings, LLC. Mr. Weslie W. Johnson is the Chief Executive Officer of Alternative Securities Markets Group Corporation, and owns 30% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. Mr. Rich Moniak is the Chief Operations Officer of Alternative Securities Markets Group Corporation and owns 30% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. Mr. Steven J. Muehler is the Chief Financial Officer and Senior Compliance Officer of Alternative Securities Markets Group Corporation and owns 30% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. Mr. Koorosh Rahimi is the President of Asset Management for Alternative Securities Markets Group Corporation and owns 5% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. Mr. David Dobkin is the President of Investment Banking for Alternative Securities Markets Group Corporation and owns 5% of the Issued and Outstanding Common Stock Shares of Alternative Securities Markets Group Corporation. (14) Address: Alternative Securities Markets Group Corporation, 4136 Del Rey Avenue, Marina Del Rey, California 90292 |
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
Page 39 |
|
|
ITEM 13. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.
Related Party Transactions
NGT Holdings LLC, the Companys Senior Managing Partner, is also the majority owner and Senior Managing Member of ACCELERA INNOVATIONS HOLDINGS LLC which owns 100% of the Equity Membership Units of the Company. Consequently, NGT Holdings LLC controls the operations of the Company and will have the ability to control all matters submitted to members for approval, including:
·
Election of the board of directors;
·
Removal of any directors;
·
Amendment of the Company’s certificate of formation or bylaws; and
·
Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination
NGT Holdings LLC will thus have complete control over the Companys management and affairs. Accordingly, this ownership may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the Equity Membership Units. This registration statement contains forward-looking statements and information relating to us, our industry and to other businesses.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 11 of Form 1-A, Model B.
ITEM 14. SECURITIES BEING OFFERED.
Secure Debt Notes
A maximum of TWENTY THOUSAND Secured Debt Notes are being offered to the public at $1,000.00 per Secured Debt Note. A maximum of $20,000,000 will be received from the offering. All Secured Debt Notes are being offered by the Company and no Secured Debt Notes are being offered by any selling shareholders.
The Secured Debt Notes will be offered for sale at a fixed price of $1,000.00 USD per Secured Debt Note. If all Secured Debt Notes are purchased, the gross proceeds to the Company will be $20,000,000.00 USD. Though the Offering is being conducted on a best-efforts basis, the Company has set an investment minimum of $1,000,000 USD before the Company will have access to the Investment Proceeds, which means all investment dollars invested in the Company prior to reaching the minimum of $1,000,000 will be held in an investment escrow account, and only after $1,000,000 in securities has been sold to investors (One Thousand Secured Debt Note Units) will the Company have access to the Investment Proceeds. Accordingly, all Investment Funds after the Investment Minimum has been achieved, will become immediately available to the Company and may be used as they are accepted. Investors will not be entitled to a refund once the Investment Minimum of $1,000,000 is achieved, and all Investors will be subject to the terms, conditions and investment risks associated with this investment.
This Offering Circular relates to the offering (the Offering) of up to 20,000 Secured Debt Note Units (the Securities) in ACCELERA INNOVATIONS FUND I, LLC. The Secured Debt Notes offered through this Offering have no voting rights. The Offering will commence promptly after the date of this Offering Circular and will close upon the earlier of (1) the sale of 20,000 Secured Debt Note Units, (2) One Year from the date this Offering begins, or (3) a date prior to one year from the date this Offering begins that is so determined by the Companys Management (the Offering Period).
The Securities to be offered with this proposed offering shall be initially offered by Company, mainly by: Mrs. Cindy Boerum, Mr. Patrick Custardo, Mr. Geoffrey Thompson and Mrs. Nancy Thompson, each Managing Members of the Company, through a web-based platform called the Alternative Securities Market Exchange. The Alternative Securities Markets Group Corporation is the Owner and Operator of the Alternative Securities Market Exchange (the ASMX), and the terms of its operations can be found in the Exhibits of this Registration Statement. The Alternative Securities Market Exchange can be accessed at: http://www.ASMX.CO and/or http://www.AlternativeSecuritiesMarket.com. In offering the Securities, the Companys Management will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934.
Page 40 |
|
|
In August of 2015, Alternative Securities Market, LLC filed as a Broker Dealer in the States of New York and California. Upon successful completion of Alternative Securities Market, LLCs Broker Dealer Registration, Alternative Securities Market, LLC will be the Prime Securities Broker for the Securities Offered with this proposed offering. Alternative Securities Market, LLC will offer the securities to the general investing public through a web-based platform called the Alternative Securities Market Exchange. The Alternative Securities Markets Group Corporation is the Owner and Operator of the Alternative Securities Market Exchange (the ASMX), and the terms of its operations can be found in the Exhibits of this Registration Statement. The Alternative Securities Market Exchange can be accessed at: http://www.ASMX.CO and/or http://www.AlternativeSecuritiesMarket.com. Alternative Securities Market, LLC is a subsidiary of Alternative Securities Markets Group Corporation.
Except as expressly provided in this Offering, any dispute, claim or controversy between or among any of the Investors or between any Investor or his/her/its Affiliates and the Company arising out of or relating to this Offering, or any subscription by any Investor to purchase Securities, or any termination, alleged breach, enforcement, interpretation or validity of any of those agreements (including the determination of the scope or applicability of this agreement to arbitrate), or otherwise involving the Company, will be submitted to arbitration in the county and state in which the Company maintains its principal office at the time the request for arbitration is made, before a sole arbitrator, in accordance with the laws of the state of Wyoming for agreements made in and to be performed in the state of Wyoming. Such arbitration will be administered by the Judicial Arbitration and Mediation Services (JAMS) and conducted under the provisions of its Comprehensive Arbitration Rules and Procedures. Arbitration must be commenced by service upon the other party of a written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. Judgment upon any award rendered by the arbitrator shall be final and may be entered in any court having jurisdiction thereof. No party to any such controversy will be entitled to any punitive damages. Notwithstanding the rules of JAMS, no arbitration proceeding will be consolidated with any other arbitration proceeding without all parties consent. The arbitrator shall, in the award, allocate all of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys fees of the prevailing party, against the party who did not prevail.
NOTICE: By executing a Subscription Agreement for this Offering, Subscriber is agreeing to have all disputes, claims, or controversies arising out of or relating to this Agreement decided by neutral binding arbitration, and Subscriber is giving up any rights he, she or it may possess to have those matters litigated in a court or jury trial. By executing this Subscription Agreement, Subscriber is giving up his, her or its judicial rights to discovery and appeal except to the extent that they are specifically provided for in this Subscription Agreement. If Subscriber refuses to submit to arbitration after agreeing to this provision, Subscriber may be compelled to arbitrate under federal or state law. Subscriber confirms that his, her or its agreement to this arbitration provision is voluntary.
Redemption:
a)
Scheduled Redemption: Unless previously redeemed, or purchased and cancelled, the Secured Debt Notes will be redeemed at their principal amount, plus any accrued interest up to the date of repurchase, upon each Secured Debt Notess Maturity.
b)
Make Whole Redemption at the Option of the Issuer: The Secured Debt Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time prior to the Maturity Date (the Call Settlement Date) on the Issuers giving not less than 30 days, but no more than 60 days notice to the Secured Debt Notes Holder (which notice shall be irrevocable and shall oblige the Issuer to redeem the Secured Debt Notes (s) on the Call Settlement Date for the full face value of each Secured Debt Notes plus all accrued interest to such date).
c)
No Other Redemption: The Issuer shall not be entitled to redeem Secured Debt Notes otherwise than as provided in Redemption Paragraphs (a) and (b).
Page 41 |
|
|
Principal, Maturity and Interest:
This Offering Circular relates to the offer and sale of up to $20,000,000 in principal amount (the Offering) of Secured Debt Notes of ACCELERA INNOVATIONS FUND I, LLC, a Wyoming Limited Liability Company (the Company). The Companys principal office is located at 20511 Abbey Dr, Frankfort, IL 60423.
The Secured Debt Notes will be issued in the minimum amount of $1,000 and in multiples of $1,000. The Secured Debt Notes will be offered in maturities of 36 to 60 months from the date issued, with a fixed interest rate depending on the term. The Company will typically issue Secured Debt Notes on the same or next day, after deposit by the Company of the Subscribers payment check and the check is collected by the Companys Bank. See Description of Secured Debt Notes on Page 71 of this Registration Statement. The Interest Rate for each Secured Debt Note will be based on the formula set forth below and varies according to the term of the Secured Debt Note. See Description of Notes Principal, Maturity and Interest on Page 73 of this Registration Statement. The Minimum and the Maximum Fixed Interest Rates which are offered will change from time to time in response to changes in the current Wall Street Journals Prime Rate data obtained from the Wall Street Journal, or a similar credible source. The Prime Rate, as reported by the Wall Street Journals Bank Survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the Federal Funds Rate, which is set by the Federal Reserve. The Interest Rates for new Secured Debt Notes are set on the First Monday of each month at the start of business based on the Wall Street Journals Prime Rate on that day. Such rates are paid on all Secured Debt Notes issued between the start of business on that Monday and the close of business on the last day prior to the First Monday of the next month. The following table sets forth the formula for determining the Interest Rates for the Secured Debt Notes and the Initial Interest Rate based on the most recent Wall Street Journals Prime Rate as of SEPTEMBER 1st, 2015.
TERM | WALL STREET JOURNALS | INTEREST RATES AS OF |
36 MONTHS | Prime Plus 4.0% | 7.25% |
42 MONTHS | Prime Plus 4.5% | 7.75% |
48 MONTHS | Prime Plus 5.0% | 8.25% |
54 MONTHS | Prime Plus 5.5% | 8.75% |
60 MONTHS | Prime Plus 6.0% | 9.25% |
If you invested $1,000 in September of 2015, then interest would be payable ANNUALLY on the last Business of March, June, September and December each year. Should the last Business Day be a Holiday, the interest distribution shall be on the following Business Day. Should the following day be a weekend, then the interest distribution shall be on the following Monday. Below is a list of ACCELERA INNOVATIONS FUND I, LLC recognized holidays.
·
New Years Day
·
Birthday of Martin Luther King, Jr.
·
Washingtons Birthday
·
Memorial Day
·
Independence Day
·
Labor Day
·
Columbus Day (for banking purposes only)
·
Veterans Day
·
Thanksgiving Day
·
The Friday following Thanksgiving Day
·
Christmas Eve
·
Christmas Day
·
New Years Eve
Optional Prepayment:
The Secured Debt Notes maybe prepaid in whole at any time prior to their respective Maturity dates with a SIX MONTH INTEREST premium paid to the Noteholder.
Page 42 |
|
|
Events of Default:
The Secured Debt Notes provide that each of the following constitutes an Event of Default with respect to the Secured Debt Notes:
1.
The failure to make a payment when due under the Secured Debt Notes (i) of any interest payment within five (5) business days of when the interest payment is due, or (ii) of the entire outstanding balance of principal and interest on the maturity date; or
2.
If the Company voluntarily files a petition under the Federal Bankruptcy Code, or under any similar or successor Federal Statute relating to Bankruptcy, Insolvency Arrangements, or Reorganizations; of if the Company fails to obtain a vacation or stay of Involuntary Proceedings brought for the Reorganization, Dissolution or Liquidation of the Company; or if the Company is adjudged a Bankrupt, or upon the Companys Dissolution, Business Failure or Discontinuance as a going concern business; or if a trustee or receive shall be appointed for the Companys corporate acquisitions ; or if there is an attachment, execution or other judicial seizure of any portion of the Companys assets, and such seizure is not discharged within ten (10) days.
In any Event of Default occurs and is continuing, at the option of the Noteholders, the entire outstanding principal balance due under the Secured Debt Notes and all accrued and unpaid Interest on the Secured Debt Notes will become immediately due and payable by the Company without further action or notice at the option of the Noteholders.
Form of Secured Debt Notes:
All Secured Debt Notes will be issued in fully registered form. The Company is entitled to treat the Registered Noteholder shown on its records as the owner of the Secured Debt Note for all purposes. Ownership of a Secured Debt Note may be registered in the name of any two or more named persons as joint tenants with right of survivorship, as tenants in common or as tenants by the entireties, and payment of principal and interest on any Secured Debt Note so registered will be made to the person or persons entitled to receive such payment as their interests may appear.
Payment at Maturity, No Rollover:
The Secured Debt Notes will NOT be subject to automatic rollover. Due to the fact automatic rollovers do not apply to the Secured Debt Notes, Investors will receive full payment of principal at Maturity.
Lost, Stolen or Destroyed Secured Debt Notes: Issuance of New Secured Debt Notes:
If a Noteholder loses his or her Secured Debt Note(s) is stolen or destroyed, the Company will issue a new Secured Debt Notes in the place of the lost, stolen or destroyed Secured Debt Note(s) if the Noteholder gives the Company a bond sufficient to indemnify the Company against any claim that may be made against it on account of the alleged loss, theft or destruction of any Secured Debt Note(s) or the issuance of a new Secured Debt Note(s).
Lack of Public Market
There is no public market for the Secured Debt Notes, and none is expected to develop for their purchase or sale.
Financial Information Provided to Investors:
Beginning with the 2015 fiscal year end, in addition to the financial information provided in this Offering Circular, the Company will provide a copy of its financial statements to all Holders of Secured Debt Notes within 120 days after the end of each fiscal year.
Page 43 |
|
|
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the material U.S. Federal Income Tax considerations relating to the acquisition, ownership and disposition of the Secured Debt Notes. The summary is based on the Internal Revenue Code (the Code), and Treasury regulations, rulings and judicial decisions as of the date hereof, all of which may be repealed, revoked or modified with possible retroactive effect. This summary applies to you only if you acquire the Secured Debt Notes for cash in this Offering at the initial Offering price and hold the Secured Debt Notes as capital assets within the meaning of Section 1221 of the Code. This summary is for general information only and does not address all aspects of the U.S. Federal Income Taxation that may be important to you in light of your particular circumstances, and it does not address state, local, foreign, alternative minimum or non-income tax considerations that may be applicable to you. Further, this summary does not deal with Noteholders that may be subject to special tax rules, including, but not limited to, insurance companies, tax-exempt organizations, financial institutions, dealers in securities or currencies, U.S. Noteholders (as described below) whose functional currency is not the U.S. Dollar, certain U.S. expatriates or Holders who hold the Secured Debt Notes as a hedge against currency risks or as part of a straddle, synthetic security, conversion transaction or other integrated transaction for U.S. Federal Tax purposes. You should consult your own tax advisor as to the particular tax consequences to your of acquiring, holding or disposing of the Secured Debt Notes.
For purposes of this summary, a U.S. Noteholder is a beneficial owner of a Secured Debt Notes that, for U.S. Federal Income Tax purposes, is: (a) an individual citizen or resident of the United States; (b) a corporation (or other business entity treated as a corporation) created or organized in or under the Laws of the United States or any State thereof (including the District of Columbia); (c) an estate the income of which is subject to U.S. Federal Income Taxation regardless of its source; or (d) a trust if (i) such trust has a valid election in effect under applicable Treasury regulations to be treated as a United States person, or (ii) a court within the United States is able to exercise primary supervision over the trusts administration and one or more United States persons have the authority to control all substantial decisions of the trust.
For purposes of this summary, a Non-U.S. Noteholder is a beneficial owner of a Secured Debt Notes that is neither a U.S. Noteholder nor a partnership or any entity or arrangement treated as a partnership for U.S. Federal Income Tax purposes. If a partnership (or other entity or arrangement treated as a partnership for U.S. Federal Income Tax purposes) holds Secured Debt Notes, then the U.S. Federal Income Tax treatment of a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partnership that holds Secured Debt Notes of a partner in such a partnership, you should consult your own tax advisor as to the particular U.S. Federal Income Tax consequences applicable to you.
U.S. Holders
Interest
We anticipate that the Secured Debt Notes will not be issued with original discount for U.S. Federal Income Tax purposes. In such case, if you are a U.S. Noteholder, interest on a Secured Debt Notes will generally be taxable to you as ordinary interest income as it accrues or is received by you in accordance with your usual method of accounting for U.S. Federal Income Tax purposes.
Sale, Exchange or Other Taxable Dispositions of Secured Debt Notes
If you are a U.S. Noteholder, upon the sale, exchange, redemption, retirement or other taxable disposition of a Secured Debt Note, you will generally recognize gain or loss for U.S. Federal Income Tax purposes in an amount equal to the difference, if any, between (i) the amount of the cash and the fair market value of any corporate acquisitions you receive on the sale or other taxable disposition (less an amount attributable to any accrued but unpaid interest, which will be taxable as ordinary interest income to the extent not previously taken into income), and (ii) your adjusted tax basis in the Secured Debt Note. Your adjusted tax basis in a Secured Debt Note will generally be equal to your cost of the Secured Debt Note, reduced by any principal payments you have previously received in respect of the Secured Debt Note. Such gain or loss will generally be treated as capital gain or loss and will be treated as long-term capital gain or loss if your holding period in the Secured Debt Note(s) exceeds on year at the time of the disposition. Long-term capital gains of non-corporate taxpayers are subject to reduced rates of taxation. The deductibility of capital losses is subject to limitation.
Backup Withholding and Information Reporting
U.S. Federal Backup Withholding may apply to payments on the Secured Debt Notes and proceeds from the sale or other disposition of the Secured Debt Notes if you are a non-corporate U.S. Noteholder and fail to provide a correct taxpayer identification number or otherwise comply with applicable requirements of the backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a credit against a U.S.
Page 44 |
|
|
Noteholders U.S. Federal Income Tax liability and may entitle such Noteholder to a refund, provided the required information is timely furnished to the Internal Revenue Service (the IRS).
A U.S. Noteholder will also be subject to information reporting with respect to payments on the Secured Debt Notes and proceeds from the sale or other disposition of the Secured Debt Notes, unless such U.S. Noteholder is an exempt recipient and appropriately establishes that exemption.
Non-U.S. Holders
Interest
Subject to the discussion of Backup Withholding and information reporting below, if you are a Non-U.S. Noteholder, payments of interest on the Secured Debt Notes to you will not be subject to U.S. Federal Income Tax (including branch profits or withholding tax), provided that:
·
You do not, directly or indirectly, actually or constructively, own 10% or more of the voting power of the stock of ACCELERA INNOVATIONS FUND I, LLC;
·
You are not a bank receiving interest on an extension of credit pursuant to a loan agreement entered into in the ordinary course of your trade or business;
·
You are not a controlled foreign corporation for U.S. Federal Income Tax purposes that is, actually or constructively, related to the Company (as provided in the Code);
·
The interest payments are not effectively connected with your conduct of a trade or business within the United States; and
·
You meet certification requirements.
You will satisfy these certification requirements if you certify on IRS Form W-8BEN, or a substantially similar substitute form, under penalties of perjury, that you are not a United States person with the meaning of the Code, provide your name and address and file such form with the withholding agent. If you hold the Secured Debt Notes through a foreign partnership or intermediary must satisfy certification requirements of applicable Treasury regulations.
Even if the requirements listed above are not satisfied, you will be entitled to an exemption from or reduction in U.S. Withholding Tax provided that:
·
You are entitled to an exemption from or reduction in Withholding Tax or interest under a tax treaty between the United States and your country of residence. To claim this exemption or reduction, you must generally complete IRS Form W-8BEN and claim this exemption or reduction on the form. In some cases, you must instead be permitted to provide documentary evidence of your claim to the intermediary, or a qualified intermediary may already have some or all of the necessary evidence in its files; or
·
The interest income on the Secured Debt Notes is effectively connected with the conduct of your trade or business in the United States. To claim this exemption, you must complete IRS Form W-8ECI.
You may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
Sale, Exchange or Other Taxable Dispositions of Secured Debt Notes
Subject to the discussion below regarding Backup Withholding and information reporting, if you are a Non-U.S. Holder, you will not be subject to U.S. Federal Income Tax (including branch profits tax) on the gain you realize on any sale, exchange, redemption, retirement or other taxable disposition of a Secured Debt Notes.
·
The gain is effectively connected with your conduct of a trade or business within the United States and, if required by an applicable treaty (and you comply with a applicable certification and other requirements to claim treaty benefits), is generally attributable to a U.S. permanent establishment;
·
You are an individual and have been present in the United States for 183 days or more in the taxable year of disposition and certain other requirements are met; or
·
A portion of the gain represents accrued but unpaid interest, in which case the U.S. Federal Income Tax rules for interest would apply to such portion.
Page 45 |
|
|
U.S. Trade or Business
If interest on a Secured Debt Note or gain from a disposition of the Secured Debt Note if effectively connected with your conduct of a U.S. trade or business, and, if required by an applicable treaty, you maintain a U.S. permanent establishment to which the interest or gain is attributable, you will generally be subject to U.S. Federal Income Tax on the interest or gain on a net basis in the same manner as if you were a U.S. Noteholder. If you are a foreign corporation, you may also be subject to a branch profits tax of 30% of your effectively connected earnings and profits for the taxable year, subject to certain adjustments, unless you qualify for a lower rate under an applicable income tax treaty.
Backup Withholding and Information Reporting
Under current U.S. Federal Income Tax, Backup Withholding and information reporting may apply to payments made by the Company (including the Companys paying agents) to you in respect of the Secured Debt Notes, unless you provide an IRS Form W-8BEN or otherwise meet documentary evidence requirements for establishing that you are a Non-U.S. Noteholder or otherwise establish an exemption. The Company (or its paying agents) may, however, report payments of interest on the Secured Debt Notes.
The gross proceeds from the disposition of your Secured Debt Notes may be subject to information reporting and Backup Withholding Tax at the applicable rate. If you sell your Secured Debt Notes outside the United States through a foreign office of a foreign broker and the sales proceeds are paid to you outside the United States, then the Backup Withholding and information reporting requirements will generally not apply to that payment. However, information reporting, but not Backup Withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell your Secured Debt Notes through the foreign office of a foreign broker that is, for U.S. Federal Income Tax purposes:
·
A United States person (within the meaning of the Code);
·
A controlled foreign corporation;
·
A foreign person 50% of more of whose gross income is effectively connected with a U.S. trade or business for a specified three-year period; or
·
A foreign partnership with certain connections to the United States
Unless such broker has in its records documentary evidence that you are not a United States person and certain other conditions are met, or you otherwise establish an exemption. In addition, Backup Withholding may apply to any payment that the broker is required to report if the broker has actual knowledge that you are a United States person.
You should consult your own tax advisor regarding the application of information reporting and Backup Withholding in your particular situation, the availability of an exemption from Backup Withholding and the procedure for obtaining such an exemption, if available. Backup Withholding is not an additional tax. Any amounts withheld under the Backup Withholding rules may be allowed as a credit against your U.S. Federal Income Tax liability and may entitle you to a refund, provided the required information is timely furnished to the IRS.
The U.S. Federal Tax discussion set forth above is included for general information only and may not be applicable depending on the Noteholders particular situation. Noteholders should consult their tax advisors with respect to the tax consequences to them of the beneficial ownership and disposition of the Secured Debt Notes, including the tax consequences under State, Local, Foreign, and other tax laws and the possible effects of changes in U.S. Federal and other Tax Laws.
(a) Description of Company Equity Membership Units
The Company is authorized by its Certificate of Formation to issue an aggregate of 20,000 shares of Equity Membership Units, $0.001 par value per share (the "Membership Unit"). As of September 1st, 2015 1,000 Equity Membership Units were issued and outstanding.
All outstanding shares of Equity Membership Units are of the same class and have equal rights and attributes. The holders of Equity Membership Units are entitled to one vote per share on all matters submitted to a vote of Shareholders of the Company. All Shareholders are entitled to share equally in dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of Equity Membership Units are entitled to share ratably in all assets remaining after payment of all liabilities.
(b) Background Information on other Equity Membership Unit Classes. None
(c) Other Debt Securities. None.
Page 46 |
|
|
(d) Other Securities to Be Registered. None.
Security Holders
As of September 1st, 2015, there were ONE THOUSAND shares of our Equity Membership Units outstanding, which were held of record by ONE shareholder, not including persons or entities that hold the membership units in nominee or "street" name through various brokerage firms.
Indemnification of Directors and Officers:
The Company is formed under the laws of Wyoming. Wyoming General Corporation Law provides that a company may indemnify directors and officers as well as other employees and individuals against expenses including attorneys fees, judgments, fines and amounts paid in settlement in connection with various actions, suits or proceedings, whether civil, criminal, administrative or investigative other than an action by or in the right of the company, a derivative action, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the company, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses including attorneys fees incurred in connection with the defense or settlement of such actions and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a companys certificate of formation, bylaws, agreement, and a vote of shareholders or disinterested directors or otherwise.
The Company's Certificate of formation provides that it will indemnify and hold harmless, to the fullest extent permitted by Wyomings General Corporation Law, as amended from time to time, each person that such section grants us the power to indemnify.
Wyoming's General Corporation Law permits a company to provide in its certificate of formation that a director of the company shall not be personally liable to the company or its shareholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
·
any breach of the directors duty of loyalty to the company or its shareholders;
·
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
·
payments of unlawful dividends or unlawful stock repurchases or redemptions; or
·
any transaction from which the director derived an improper personal benefit.
The Companys Certificate of Formation provides that, to the fullest extent permitted by applicable law, none of our directors will be personally liable to us or our shareholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this provision will be prospective only and will not adversely affect any limitation, right or protection of a director of our company existing at the time of such repeal or modification.
Page 47 |
|
|
FINANCIAL STATEMENTS SECTION:
TITLE | PAGE |
Company Balance Sheet | 49 |
Company Statement of Revenue and Expense | 50 |
Statement of Shareholders Equity | 51 |
Statement of Cash Flows | 52 |
Notes to Financial Statements | 53 |
Page 48 |
|
|
ACCELERA INNOVATIONS FUND I, LLC
(A Development Stage Company)
BALANCE SHEET - Unaudited
September 1st, 2015
ASSETS |
|
|
Current Assets |
|
|
· Cash |
| $1,000 |
· Accounts Receivable (Capitalization Commitment) |
| $0.00 |
· Inventory |
| $0.00 |
· Prepaid Expenses |
| $0.00 |
· Short-term Investments |
| $0.00 |
| Total Current Assets | $1,000 |
Fixed (Long-Term)Assets |
|
|
· Long-Term Investments |
| $0.00 |
· Property & Equipment |
| $0.00 |
(Less Accumulated Depreciation) |
| $0.00 |
· Intangible Assets |
|
|
| Total Fixed Assets | $0.00 |
Other Assets |
|
|
· Deferred Income Tax |
| $0.00 |
· Other |
| $0.00 |
| Total Fixed Assets | $0.00 |
TOTAL ASSETS |
| $1,000 |
|
|
|
LIABILITIES & OWNERS EQUITY |
|
|
Current Liabilities |
| $0.00 |
· Accounts Payable |
| $0.00 |
· Short-term Loans |
| $0.00 |
· Income Taxes Payable |
| $0.00 |
· Accrued Salaries & Wages |
| $0.00 |
· Unearned Revenue |
| $0.00 |
· Current Portion of Long-term Debt |
| $0.00 |
| Total Current Liabilities | $0.00 |
Long-Term Liabilities |
|
|
· Long-Term Debt |
| $0.00 |
· Deferred Income Tax |
| $0.00 |
· Other |
| $0.00 |
| Total Long-term Liabilities | $0.00 |
Owners Equity |
|
|
· Owners Investment |
| $1,000 |
· Accounts Receivable |
| $0.00 |
| Total Owners Equity | $0.00 |
TOTAL LIABILITIES & OWNERS EQUITY |
| $1,000 |
SEE NOTES TO FINANCIAL STATEMENTS
Page 49 |
|
|
ACCELERA INNOVATIONS FUND I, LLC
(A Development Stage Company)
STATEMENTS OF REVENUE AND EXPENSES - Unaudited
June 11th, 2015 (Inception) to September 1st, 2015
REVENUE | June 1st,2015 |
· Total Revenues | $0.00 |
TOTAL REVENUES | $0.00 |
|
|
EXPENSES |
|
· Accounting | $0.00 |
· Legal | $0.00 |
· Taxes, other | $0.00 |
· Organization Costs | $0.00 |
TOTAL EXPENSES | $0.00 |
|
|
NET LOSS | ($0.00) |
|
|
SEE NOTES TO FINANCIAL STATEMENTS
Page 50 |
|
|
ACCELERA INNOVATIONS FUND I, LLC
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS EQUITY - Unaudited
For the period for
June 11th, 2015 to September 1st, 2015
| Founding Shareholder | Total |
Founding Contribution | $1,000 | $1,000 |
All Costs | $0.00 | $0.00 |
Net Loss | ($0.00) | ($0.00) |
|
|
|
BALANCE, September 1st, 2015 | $1,000 | $1,000 |
SEE NOTES TO FINANCIAL STATEMENTS
Page 51 |
|
|
ACCELERA INNOVATIONS FUND I, LLC
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the period for
June 1st 2015 to June 30st, 2015
CASH FLOWS FROM OPERATING ACTIVITIES | June 11th, 2015 to September 1st, 2015 |
· Net Loss | ($0.00) |
· Other | $0.00 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES | June 11th, 2015 to September 1st, 2015 |
· All Investing Activities | $0.00 |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES | June 11th, 2015 to September 1st, 2015 |
· All Financing Activities | $0.00 |
|
|
NET INCREASE IN CASH | $0.00 |
|
|
Cash, Beginning of year | $1,000 |
Cash, End of Year | $1,000 |
|
|
|
|
|
|
SEE NOTES TO FINANCIAL STATEMENTS
Page 52 |
|
|
ACCELERA INNOVATIONS FUND I, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION
ACCELERA INNOVATIONS FUND I, LLC, a Wyoming Limited Liability Company was formed on June 11th, 2015.
Upon its organization as a Wyoming Limited Liability Company, the Company issued 100% of its Outstanding Membership to ACCELERA INNOVATIONS HOLDINGS LLC.
ACCELERA INNOVATIONS HOLDINGS LLC initially capitalized the Company an opening deposit and balance of $1,000 USD.
NOTE 2. BASIS OF ACCOUNTING:
The Financial Statements of the Company have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Page 53 |
|
|
SIGNATURES
The Issuer has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized.
ACCELERA INNOVATIONS FUND I, LLC
By: Mrs. Cindy Boerum
By: Mrs. Cindy Boerum
Name: Mrs. Cindy Boerum
Title: Managing Member of ACCELERA INNOVATIONS FUND I, LLC
_____________________________________________________________________________
ACCELERA INNOVATIONS FUND I, LLC
By: Mr. Patrick Custardo
By: Mr. Patrick Custardo
Name: Mr. Patrick Custardo
Title: Managing Member of ACCELERA INNOVATIONS FUND I, LLC
_____________________________________________________________________________
ACCELERA INNOVATIONS HOLDINGS LLC
By: Mr. Geoffrey Thompson
By: Mr. Geoffrey Thompson
Name: Mr. Geoffrey Thompson
Title: Managing Member
Page 54 |
|
|
ACCELERA INNOVATIONS HOLDINGS LLC
By: Mrs. Nancy Thompson
By: Mrs. Nancy Thompson
Name: Mrs. Nancy Thompson
Title: Managing Member
_______________________________________________________________________________________________________
ACCELERA INNOVATIONS HOLDINGS LLC
By: Mr. Weslie Johnson
By: Mr. Weslie Johnson
Name: Mr. Weslie Johnson
Title: External Managing Member (Alternative Securities Market Group Corporation
Page 55 |
|
|
Page 56 |
|
|
THE (ASMX)
“ALTERNATIVE SECURITIES
MARKET EXCHANGE”
RULEBOOK
As filed along with SEC Form 1 and all Exhibits, with the
United States Securities & Exchange Commission on:
August 3rd, 2015
Disclaimer:
The Alternative Securities Market Exchange (the “ASMX”) is entrusted with the authority to preserve and strengthen the quality and public confidence in Alternative Securities and Alternative Investments. The ASMX stands for Integrity and Ethical practices in order to enhance investor confidence in Alternative Securities and Alternative Investments, thereby contributing to the financial health of the overall economy, and supporting the capital formation process. From the ASMX’s Early and Development Stage Companies, to Operating Companies of International Stature, each are recognized as sharing these important traits that we hold true.
The ASMX, therefore has broad discretionary authority over the initial and continued listing and trade of securities on the ASMX in order to maintain the quality, the public confidence in the ASMX, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest.
The ASMX may use such discretion to deny any application of any Issuer applying for listing for trade, apply additional or more stringent criteria for the initial or continued listing of any securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on the ASMX inadvisable or unwarranted in the opinion of the ASMX, even though the securities meet all enumerated criteria for initial or continued listing on the ASMX.
Page 1 | ||
TABLE OF CONTENTS
TOPIC: | PAGE |
CHAPTER I: Adoption, Interpretation and Application of Rules and Definitions | 03 |
CHAPTER II: Members of the ASMX | 10 |
CHAPTER III: Issuers of the ASMX | 17 |
CHAPTER IV: Rules of Fair Market Practice | 26 |
CHAPTER V: Books and Records | 29 |
CHAPTER VI: Supervision | 30 |
CHAPTER VII: Trading Rules | 31 |
CHAPTER VIII: Trading Practice Rules | 45 |
CHAPTER IX: Listings & Listed Issuers | 47 |
CHAPTER X: Fees & Charges | 57 |
CHAPTER XI: Business Conduct | 58 |
Exhibits: | |
Page 2 | ||
CHAPTER I
ADOPTION, INTERPRETATION AND APPLICATION OF RULES,
AND DEFINITIONS
Rule 1.1.0 – Adoption of Exchange Rules
The following Alternative Securities Market Exchange (the “ASMX”) Rules are adopted pursuant to the Corporation’s Articles of Incorporation (Exhibit A) and the Corporation’s Bylaws (Exhibit B).
Rule 1.2.0 – Interpretation
ASMX Rules shall be interpreted in such a manner to comply with the rules and requirements of the Act and to effectuate the purposes and business of the ASMX, and to require that all practices in connection with the securities business be just, reasonable and not unfairly discriminatory.
Rule 1.3.0 – Applicability
ASMX Rules shall apply to all Members and persons associated with a Member.
Rule 1.4.0 – Effective Time
All ASMX Rules shall be effective when approved by the Commission in accordance with the Act and the rules and regulations thereunder, except for those Rules that are effective upon filing with the Commission in accordance with the Act and the rules thereunder and except as otherwise specified by the ASMX or provided elsewhere in these Rules.
Rule 1.5.0 – Definitions
Unless the context otherwise requires, for all purposes of these ASMX Rules, terms used in ASMX Rules shall have the meaning assigned in Article I of the Corporations’ Bylaws or as set forth below:
a)
Act – The term “Act” or “Exchange Act” shall mean the Securities Act of 1933, as amended.
b)
Adverse Action – The term “Adverse Action” shall mean any action by the ASMX which affects the rights of any Member, applicant for membership, or any person associated with a Member (including the denial of membership and the barring of any person from becoming associated with a Member) and any prohibition or limitation by the ASMX imposed on any person with respect to access to services offered by the ASMX, or a Member thereof. This term does not include disciplinary actions for violations of any provision of the Act or the rules and regulations promulgated thereunder, or any provision of the Bylaws or ASMX Rules or any interpretation thereof or resolution or order of the Board of Directors or appropriate ASMX Market committee which has been filed with the Commission pursuant to Section 19(b) of the Act and has become effective thereunder.
c)
After Hours Market – The term “After Hours Market” shall mean the time between 4:00:01 PM and 8:59:59 AM Eastern Time (New York) / 1:00PM and 6:00AM Pacific Standard Time (Los Angeles)
d)
Page 3 | ||
Alternative Securities Market Exchange, Inc. – The Owner and Operator of the ASMX. The Alternative Securities Market Exchange, Inc. is a wholly owned subsidiary of the Alternative Securities Markets Group Corporation.
e)
Alternative Securities Markets Group Corporation – The Alternative Securities Markets Group Corporation is a Multi-State Registered Investment Advisory Firm that specializes in Alternative Securities Investment Advisory services to institutional and private investors. It is the parent corporation of the Alternative Securities Market, LLC and the Alternative Securities Market Exchange, Inc.
f)
Alternative Securities Market, LLC – The exclusive Broker-Dealer for the ASMX. The Alternative Securities Market, LLC is a wholly owned subsidiary of the Alternative Securities Markets Group Corporation.
g)
Ask – The term “Ask” is a written indication by an Issuer or a Holder of a security, of a willingness to sell a security of an ASMX listed company, and the price at which the Issuer or the Holder is willing to sell the security for.
h)
ASMX: the “Alternative Securities Market Exchange”
i)
ASMX Book – The term “ASMX Book” shall mean the informational data of all stock sales (Primary and Secondary) on the ASMX.
j)
Auction Market – The term “Auction Market”, also referred to as the “Secondary Market” of the ASMX, is a market in which buyers enter competitive bids and sellers enter competitive offers simultaneously.
k)
Bid – The term “Bid” is an indication by an Investor, a broker, or a dealer of a willingness to buy a security, and the price at which the Investor, Broker or Dealer is willing to buy the security for.
l)
Board of Directors – The terms “Board” and “Board of Directors” shall mean the Board of Directors of the ASMX.
m)
Broker – the term “Broker” shall have the same meaning as in Section 3(a)(4) of the Act.
n)
Commission – The term “Commission” shall mean the Securities and Exchange Commission
o)
Dealer – The term “Dealer” shall have the same meaning as in Section 3(a)(5) of the Act.
p)
Designated Self-Regulatory Organization - The term “Designated Self-Regulatory Organization” shall mean a self-regulatory organization, other than the ASMX, designated by the Commission under Section 17(d) of the Act to enforce compliance by Members with ASMX Market Rules.
q)
“Entity” – The term “Entity” shall be any:
a.
Bank
b.
Insurance Company
c.
Registered Investment Company
d.
Business Development Company
e.
Small Business Investment Company
f.
State or SEC Registered Investment Advisor
g.
Registered Broker-Dealer
r)
Exchange Act – The term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
s)
Holder – The owner of a security.
t)
Page 4 | ||
Issuer – The corporation or company that offers or proposes to offer its securities for sale on the ASMX.
u)
Listed Trading Security - The term “Listed Trading Security” is an Issuer’s securities that are eligible and allowed to be traded on the ASMX’s Secondary Market.
v)
Market – The term “Market” shall mean the Alternative Securities Market Exchange, Inc., either an exempt from registration securities exchange, or a nationally securities exchange.
w)
Market Professional – The term “Market Professional” shall mean any of the following Securities Related Professionals. Market Professionals may be Advisors and/or Investing Entities.
a.
Bank - (may be a Member)
b.
Insurance Company - (may be a Member)
c.
Registered Investment Company - (may be a Member)
d.
Business Development Company - (may be a Member)
e.
Small Business Investment Company - (may be a Member)
f.
State or SEC Registered Investment Advisor - (may be a Member)
g.
Registered Broker-Dealer - (may be a Member)
h.
Transfer Agent - (non-Member Only)
i.
Clearing Company - (non-Member Only)
x)
Member – The term “Member” shall mean any Person that has been approved by an Investment Coordinator of the ASMX, who meets the qualifications as an “ASMX Qualified Investor”, “Accredited Investor” or “California Qualified Investor”, and has been issued an “ASMX Investor ID Number”.
a.
Accredited Investor –
i.
United States:
1.
A natural person who has individual net worth, or joint net worth with the Person’s spouse, that exceeds $1 Million USD at the time of the purchase, or has assets under management of $1 Million USD or above, excluding the value of their primary residence; or
2.
A natural person with income exceeding $200,000 USD in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current years; or
3.
A trust with assets in excess of $5 Million USD, not formed to acquire the securities offered, whose purchases a sophisticated person makes; or
4.
A bank, insurance company, registered investment company, business development company, or small business investment company; or
5.
An employee benefit plan, with the meaning of the Employee Retirement Income Securities Act, if a bank, insurance company, or registered investment advisor makes the investment decisions, or if the plan has total assets in excess of $5 Million USD; or
6.
A charitable organization, corporation, or partnership with assets exceeding $5 Million USD; or
7.
A directors, executive officer, or general partners of the company selling the securities; or
8.
A business in which all the equity owners are accredited investors.
ii.
Canada:
1.
A person under the securities legislation of a jurisdiction of Canada, as an adviser or dealer, other than a person registered solely as a limited
Page 5 | ||
market dealer under one or both of the Securities Act (Ontario) or the Securities (Newfoundland or Labrador); or
2.
An individual registered or formerly registered under the securities legislation of Canada as a representative of a person referred to in paragraph (a); or
3.
An individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000 USD; or
4.
An individual whose net income before taxes exceeds $200,000 USD in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 USD in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; or
5.
An individual who, either alone or with a spouse, has net assets of at least $5,000,000 USD; or
6.
A person, other than an individual investment fund, that has net assets of at least $5,000,000 USD as shown on its most recently prepared financial statements; or
7.
A trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; or
8.
An investment fund that distributes or has distributed its securities to (i) a person that is or was an accredited investor at the time of the distribution, (ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 of the “National Instrument (Canada)” 45 106 (Minimum amount investment) or 2.19 of the “National Instrument (Canada)” 45 106 (Additional investment in investment funds), or (iii) a person described in paragraph (i) or (ii) that acquires or acquired securities to in section 2.18 of the “National Instrument (Canada)” 45 106 (Investment fund reinvestment).
9.
A person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an advisor or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; or
10.
A person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors (as defined in the “National Instrument (Canada)” 45 106); or
11.
An investment fund that is advised by a person registered as an advisor or a person that is exempt from registration as an advisor.
iii.
Australia
1.
S708(8) of the Corporations Act 2001 (Australia) is found in Chapter 6D (Fundraising). It defines “sophisticated investor” so as to exclude them from certain disclosure requirements.
2.
S708(8) of the Corporations Act 2001 (Australia) provides for an accountant to issue a certificate stating that an individual meets the criteria prescribed in the Corporations Regulations 2001 (Australia), namely net assets of at least $2.5 Million USD, or a gross income for each of the last two financial years of at least $250,000 USD.
3.
Any Investor with a “Sophisticated Investor Certificate” issued by the Australian Securities and Investment Commission.
iv.
Page 6 | ||
European Union
1.
European Investors meeting the term “accredited” must satisfy at least two of the following quantitative criteria in assessing the Investor’s expertise, experience and knowledge.
a.
The Investor has carried out investment related transactions, in significant size (at least EUR 50,000), on a relevant securities market at an average frequency of ten transactions per quarter over the previous four quarters;
b.
The size of the Investor’s financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds EUR 500,000;
c.
The Investor works or has worked in the financial sector for at least one year in a professional position which requires knowledge of the transactions or services envisaged.
v.
Israel
1.
An investment trust or fund manager
2.
A management company or Provident fund as defined in the Israeli fund law
3.
An insurance company
4.
A banking corporation and auxiliary corporation as defined in the Israeli Banking Law (Licensing), other than a joint services company
5.
A registered (licensed) investment advisor
6.
An exchange member
7.
A underwriter qualified under Section 506(c) of the Israeli Securities Act
8.
Corporation (except a corporation incorporated for the purpose of receiving investment advisory services, investment marketing or portfolio management) with equity of more than ILS50 Million.
9.
A natural person that gave consent in writing to be considered eligible and that meets at least two of the criterion below:
a.
Owns a total value of cash, deposits, financial assets and securities as defined in Section 52 of the Israel Securities Act which exceeds ILS12 Million;
b.
Has expertise and skills in capital markets or was employed at least one year in a professional position that requires expertise in capital markets;
c.
Has made at least 30 transactions per quarter for the last four quarters. This does not include transactions made by the person’s portfolio manager on a non-discretionary basis.
10.
A corporation which is wholly owned by accredited investors based on the criteria above
11.
A corporation incorporated abroad whose activities are similar to those of the corporation set out above
vi.
Singapore
1.
As defined in Section 4A(1)(a) of the Securities and Futures Act (SFSA), Chapter 2899.
a.
Net Personal assets exceeding SGD 2 Million (or equivalent in foreign currency); or
b.
Income in preceding 12 months of not less than SGD 300,000 (or equivalent in foreign currency); or
c.
A corporation with net assets exceeding $10 Million USD in value (or its equivalent in foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by – (a) the most recent audited balance-sheet of the corporation; or (b) where the corporation is not required to prepare audited accounts regularly, a
Page 7 | ||
balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months;
d.
The trustee of such trust as the Authority may prescribe, when acting in that capacity; or
e.
Such other person as the Authority may prescribe.
b.
ASMX Qualified Investor – As defined by the ASMX to be “an Individual who is, Individuals who are, or a corporation, company or fund comprised of sophisticated investors, each capable of protecting themselves in making any investment decisions.”
c.
California Qualified Investor –
i.
Any resident of the State of California whose individual net worth is no less than $250,000 USD and had, during the immediately preceding tax year, gross income of $100,000 USD, and reasonably expects gross income in excess of $100,000 USD during the current tax year;
ii.
Any natural resident of the State of California who has a net worth of $500,000 USD. “Net Worth” for a California Qualified Investor shall be determined exclusive of home, home furnishings and automobiles. Other assets included in the computation of net worth may be valued at Fair Market Value.
d.
NOTE: A Market Professional may also be considered a Member in the event the Market Professional meets the criteria of “Member” as detailed above.
y)
Primary Market – Is a Market where Issuers sell securities of its Corporation or Company to Investors, and where the proceeds of the Offering go to the issuing corporation. The Issuers on the Primary Market are seeking to increase its capitalization either by selling shares of stock, or by selling notes or bonds to Investors.
z)
Qualified Clearing Agency – The term “Qualified Clearing Agency” means a clearing agency registered with the Commission pursuant to Section 17A of the Act that is deemed qualified by the ASMX.
aa)
Registered Broker Dealer – The term “Registered Broker – Dealer” means any registered broker or dealer, as defined in Section 3(a)(48) of the Act, that is registered with the Commission under the Act.
bb)
Regular Market Hours – The term “Regular Market Hours” means the time between 9:00:00 AM and 4:00:00 PM Eastern Standard Time (New York) / 6:00:00 AM and 1:00:00 PM Pacific Standard Time (Los Angeles)
cc)
Secondary Market – The term “Secondary Market” of the ASMX where securities are bought and sold between Investors after their initial sale to Investors on the ASMX’s Primary Market.
dd)
Statutory Disqualification – The term “Statutory Disqualification” shall mean any statutory disqualification as defined in Section 3(a)(39) of the Act.
ee)
System – The term “System” shall mean the electronic communications and trading facility designated by the Board of Directors through which securities orders of Members and Issuers are consolidated for ranking, execution and, when applicable, routing away.
ff)
Unlisted Trading Security – The term “Unlisted Trading Security” is an issuer’s securities that are no longer allowed to be traded on the ASMX’s Secondary Market as the Issuer is deficient of its
Page 8 | ||
listing and trading agreement with the ASMX, has moved to an Over-the-Counter Securities Market or Regulated Securities Exchange, or has delisted from the ASMX.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
Page 9 | ||
CHAPTER II
MEMBERS OF THE
ALTERNATIVE SECURITIES MARKET EXCHANGE
Rule 2.1.0 – Rights, Privileges and Duties of Alternative Securities Market Exchange Members
Unless otherwise stated in the ASMX Rules each Member of the ASMX shall have the same rights, privileges and duties of any other Member of the ASMX.
Rule 2.2.0 – Obligations of the Members of the Alternative Securities Market Exchange
In addition to all other obligations imposed by the ASMX, in the Alternative Securities Market Exchange Rules, all Members of the ASMX, as a condition of effecting approved securities transactions on the ASMX’s trading facilities, shall agree to be regulated by the ASMX and shall recognize that the ASMX is obligated to undertake to enforce compliance with the provisions of the Alternative Securities Market Exchange Rules, its Corporate Bylaws, its interpretations and policies and with the provisions of the Act, the Exchange Act, and regulations thereunder, and that, subject to orders and rules of the Commission, the ASMX is required to discipline Members and persons associated with Members for violations of the provisions of the Alternative Securities Market Exchange Rules, its Corporate Bylaws, its interpretations and policies and the Act, the Exchange Act, and regulations thereunder, by expulsion, suspension, limitation of activities, functions, and operations, fines, censure, being suspended or barred from being associated with a Member, or any other fitting sanction.
Rule 2.3.0 – Eligibility to be a Member of the Alternative Securities Market Exchange
Except as herein after provided, any Member:
a.
Accredited Investor –
i.
United States:
1.
A natural person who has individual net worth, or joint net worth with the Person’s spouse, that exceeds $1 Million USD at the time of the purchase, or has assets under management of $1 Million USD or above, excluding the value of their primary residence; or
2.
A natural person with income exceeding $200,000 USD in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current years; or
3.
A trust with assets in excess of $5 Million USD, not formed to acquire the securities offered, whose purchases a sophisticated person makes; or
4.
A bank, insurance company, registered investment company, business development company, or small business investment company; or
5.
An employee benefit plan, with the meaning of the Employee Retirement Income Securities Act, if a bank, insurance company, or registered investment advisor makes the investment decisions, or if the plan has total assets in excess of $5 Million USD; or
6.
A charitable organization, corporation, or partnership with assets exceeding $5 Million USD; or
7.
Page 10 | ||
A directors, executive officer, or general partners of the company selling the securities; or
8.
A business in which all the equity owners are accredited investors.
ii.
Canada:
1.
A person under the securities legislation of a jurisdiction of Canada, as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities (Newfoundland or Labrador); or
2.
An individual registered or formerly registered under the securities legislation of Canada as a representative of a person referred to in paragraph (a); or
3.
An individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000 USD; or
4.
An individual whose net income before taxes exceeds $200,000 USD in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 USD in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; or
5.
An individual who, either alone or with a spouse, has net assets of at least $5,000,000 USD; or
6.
A person, other than an individual investment fund, that has net assets of at least $5,000,000 USD as shown on its most recently prepared financial statements; or
7.
A trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; or
8.
An investment fund that distributes or has distributed its securities to (i) a person that is or was an accredited investor at the time of the distribution, (ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 of the “National Instrument (Canada)” 45 106 (Minimum amount investment) or 2.19 of the “National Instrument (Canada)” 45 106 (Additional investment in investment funds), or (iii) a person described in paragraph (i) or (ii) that acquires or acquired securities to in section 2.18 of the “National Instrument (Canada)” 45 106 (Investment fund reinvestment).
9.
A person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an advisor or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; or
10.
A person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors (as defined in the “National Instrument (Canada)” 45 106); or
11.
An investment fund that is advised by a person registered as an advisor or a person that is exempt from registration as an advisor.
iii.
Australia
1.
S708(8) of the Corporations Act 2001 (Australia) is found in Chapter 6D (Fundraising). It defines “sophisticated investor” so as to exclude them from certain disclosure requirements.
2.
S708(8) of the Corporations Act 2001 (Australia) provides for an accountant to issue a certificate stating that an individual meets the criteria prescribed in the Corporations Regulations 2001 (Australia),
Page 11 | ||
namely net assets of at least $2.5 Million USD, or a gross income for each of the last two financial years of at least $250,000 USD.
3.
Any Investor with a “Sophisticated Investor Certificate” issued by the Australian Securities and Investment Commission.
iv.
European Union
1.
European Investors meeting the term “accredited” must satisfy at least two of the following quantitative criteria in assessing the Investor’s expertise, experience and knowledge.
a.
The Investor has carried out investment related transactions, in significant size (at least EUR 50,000), on a relevant securities market at an average frequency of ten transactions per quarter over the previous four quarters;
b.
The size of the Investor’s financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds EUR 500,000;
c.
The Investor works or has worked in the financial sector for at least one year in a professional position which requires knowledge of the transactions or services envisaged.
v.
Israel
1.
An investment trust or fund manager
2.
A management company or Provident fund as defined in the Israeli fund law
3.
An insurance company
4.
A banking corporation and auxiliary corporation as defined in the Israeli Banking Law (Licensing), other than a joint services company
5.
A registered (licensed) investment advisor
6.
An exchange member
7.
A underwriter qualified under Section 506(c) of the Israeli Securities Act
8.
Corporation (except a corporation incorporated for the purpose of receiving investment advisory services, investment marketing or portfolio management) with equity of more than ILS50 Million.
9.
A natural person that gave consent in writing to be considered eligible and that meets at least two of the criterion below:
a.
Owns a total value of cash, deposits, financial assets and securities as defined in Section 52 of the Israel Securities Act which exceeds ILS12 Million;
b.
Has expertise and skills in capital markets or was employed at least one year in a professional position that requires expertise in capital markets;
c.
Has made at least 30 transactions per quarter for the last four quarters. This does not include transactions made by the person’s portfolio manager on a non-discretionary basis.
10.
A corporation which is wholly owned by accredited investors based on the criteria above
11.
A corporation incorporated abroad whose activities are similar to those of the corporation set out above
vi.
Singapore
1.
As defined in Section 4A(1)(a) of the Securities and Futures Act (SFSA), Chapter 2899.
a.
Net Personal assets exceeding SGD 2 Million (or equivalent in foreign currency); or
b.
Income in preceding 12 months of not less than SGD 300,000 (or equivalent in foreign currency); or
c.
A corporation with net assets exceeding $10 Million USD in value (or its equivalent in foreign currency) or such other
Page 12 | ||
amount as the Authority may prescribe, in place of the first amount, as determined by – (a) the most recent audited balance-sheet of the corporation; or (b) where the corporation is not required to prepare audited accounts regularly, a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months;
d.
The trustee of such trust as the Authority may prescribe, when acting in that capacity; or
e.
Such other person as the Authority may prescribe.
b.
ASMX Qualified Investor – As defined by the ASMX to be “an Individual who is, Individuals who are, or a corporation, company or fund comprised of sophisticated investors, each capable of protecting themselves in making any investment decisions.”
c.
California Qualified Investor –
i.
Any resident of the State of California whose individual net worth is no less than $250,000 USD and had, during the immediately preceding tax year, gross income of $100,000 USD, and reasonably expects gross income in excess of $100,000 USD during the current tax year;
ii.
Any natural resident of the State of California who has a net worth of $500,000 USD. “Net Worth” for a California Qualified Investor shall be determined exclusive of home, home furnishings and automobiles. Other assets included in the computation of net worth may be valued at Fair Market Value.
d.
NOTE: A Market Professional may also be considered a Member in the event the Market Professional meets the criteria of “Member” as detailed above.
No person or entity shall be admitted as, or be entitled to continue as a Member unless such person or entity meets the standards of financial competence and experience as the ASMX may prescribe. Each ASMX Investment Coordinator shall have the responsibility and duty to ascertain by investigation the good character, personal or business repute, qualifications, investment experience and financial competence of any person or entity applying for registration as a Member with the ASMX.
Rule 2.4.0 - Restriction
No person, or Entity, may become a Member, or continue as a Member, in any capacity on the ASMX where:
·
Such person does not, or no longer meets the eligibility requirements stated in Rule 2.3.0; or
·
Such person is subject to a statutory disqualification; or
·
Any Registered Entity that becomes unregistered, or has its Registration become suspended, revoked, terminated, disqualified, surrendered, vacated, abandoned, or dissolved; or
·
Any person or entity that fails to demonstrate to the ASMX adequate financial or investment capability, capacity, integrity and security necessary to conduct business on the ASMX; or
·
Any person or entity that is subject to any unsatisfied liens, judgments or unsubordinated credit claims of a material nature, which, in the absence of a reasonable explanation therefore, remain outstanding for more than six months; or
·
Any person or entity that has been subject to any bankruptcy proceedings, receivership or
Page 13 | ||
arrangement for the benefit of creditors within the past three years; or
·
Any person or entity in an established pattern of failure to pay just debts or has defaulted, without a reasonable explanation, on any obligation, and has been left unsatisfied for more than six months; or
·
No person or entity shall be admitted as a Member of the ASMX if it is determined by the Investment Coordinator of the ASMX that the person or entity has engaged, and there is a reasonable likelihood that such person again may engage, in acts or practices inconsistent with just and equitable principles of investing or trading on the ASMX.
No person or entity shall be admitted as a Member of the ASMX unless such person or entity:
·
Each person has completed the appropriate investor suitability questionnaire and supplied copies of the appropriate documents as required; or
·
Each entity has completed the appropriate institutional suitability questionnaire and supplied copies of the appropriate documents as required.
·
Each person or entity must agree to the Alternative Securities Market Exchange’s examination of such person’s or entity’s books and records as required by the ASMX, and to agree to allow the ASMX to verify the accuracy of any information so supplied; and
·
Each person or entity must agree to be regulated by the ASMX and to recognize that the ASMX is obligated to undertake to enforce compliance with the provisions of the Alternative Securities Market Exchange Rules, the Corporation Bylaws, the interpretations and policies of the ASMX and the provisions of the Act and the regulations thereunder.
Rule 2.5.0 – Investment and Financial Proficiency & Professional Examinations
1.
The ASMX requires each Person or Entity to meet the requirements of “Accredited Investor”, “Qualified Investor” or “California Qualified Investor” as detailed in Rule 2.3.0. This Investor Classification is determined by each applying Member to complete an “Investor Suitability Questionnaire” and supplying the required documents as detailed in Rule 2.4.0.
2.
The ASMX does not require the successful completion of any written proficiency examinations for any Persons or Entities.
3.
The ASMX does not require any continuing education courses be attended or completed by any Person or Entity.
Rule 2.6.0 – Procedures for Applying for Membership to the Alternative Securities Market Exchange
·
Application
Ø
Where to file: A Person or Entity seeking admission to the ASMX must complete the appropriate Investor Suitability Questionnaire as found at http://www.ASMX.CO and/ or http://www.AlternativeSecuritiesMarket.com, or as requested by sending an email to LEGAL@ALTERNATIVESECURITIESMARKET.COM requesting an “Investor Suitability Questionnaire” document be emailed or mailed by U.S. Mail to the requestor, or by calling (800) 366-0908 and requesting an “Investor Suitability Questionnaire” be emailed or mailed by U.S. Mail to the requestor.
Page 14 | ||
The Person or Entity seeking admission to the ASMX must complete the appropriate “Investor Suitability Questionnaire” and return the completed “Investor Suitability Questionnaire” and all required documents to the “Investor Coordinator Division” of the ASMX.
Online:
at: http://www.AlternativeSecuritiesMarket.com
at: http://www.ASMX.CO
By Email:
Legal@AlternativeSecuritiesMarket.com
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Investment Coordinators
4136 Del Rey Avenue
Marina Del Rey, California 90292
Ø
Decision: After considering an application by an Investor for Membership, the ASMX shall issue a written decision within two business days of receiving a completed “Investor Suitability Questionnaire”, setting forth its findings and conclusions.
Types of Conclusions:
§
“Accredited Investor” – Able to invest in all Securities offered to Investors on the Primary & Secondary Market. (State Availability Restrictions may apply).
§
“ASMX Qualified Investor” – Able to invest in all Securities open to “ASMX Qualified Investors”. (State Availability Restrictions may apply).
§
“California Qualified Investor” – Able to invest in Securities that are issued only to residents of the State of California pursuant to California Intra-State Exemption 1001.
§
“Application Incomplete” – The Applicant will not be granted Membership or Access to the ASMX, and the Application review is suspended until the time that the application is completed or the required documents are fully submitted to the ASMX for review and consideration.
§
“Application Denied” – Upon review and consideration by the ASMX Investment Coordinator, the Coordinator determines that the Applicant does not meet the standards required for “Accredited Investor”, “ASMX Qualified Investor” or “California Qualified Investor”.
Ø
Appeal: Decisions by the Investment Coordinator may be appealed to the Board of Directors of the ASMX for reconsideration. Requests for Appeals are required to be in writing, and submitted to the ASMX Board of Directors by:
By Email:
Legal@AlternativeSecuritiesMarket.com
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Appeals
4136 Del Rey Avenue
Marina Del Rey, California 90292
Page 15 | ||
Appeals submitted to the Board of Directors will be reviewed by all members of the ASMX Board of Directors, and a written decision will be issued within 30 days of receipt of the request for Appeal.
Rule 2.7.0 – Revocation of Alternative Securities Market Exchange Membership of a Member
Members may invest in approved securities transactions on the ASMX’s - Primary Market and Secondary Market per the Member’s Investor classification (“Accredited Investor” or “ASMX Qualified Investor” or “California Qualified Investor”). Except where determined by the Commission or a Designated Self-Regulatory Organization, the ASMX shall assume the responsibility to monitor the continued qualifications of a Member on an annual basis. The ASMX reserves the right to suspend or revoke a Member’s Membership to the ASMX at any time the ASMX has reason to believe that the Member fails to meet the qualifications of Membership of the Alternative Securities. In connection with any suspension or revocation of rights as a Member, or the voluntary termination of rights as a Member pursuant to Rule 2.8 below, the Member’s Membership in the ASMX shall be cancelled.
Rule 2.8.0 – Voluntary Termination of Rights as a Member
A Member of the ASMX may voluntarily terminate its rights as a Member only by a written resignation addressed to the ASMX’s Secretary.
By Email:
Legal@AlternativeSecuritiesMarket.com
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Investment Coordinators
4136 Del Rey Avenue
Marina Del Rey, California 90292
Such resignation shall not take effect until 30 days after all of the following considerations have been satisfied: (i) receipt of such written resignation; (ii) all indebtedness due the ASMX (Alternative Securities Market Exchange, Inc), Alternative Securities Market, LLC or Alternative Securities Markets Group Corporation; (iii) any ASMX investigation or disciplinary action brought against the Member has reached a final disposition; and (iv) any examination of such Member in process is completed and all exceptions noted have been reasonably resolved; provided, however, that the Board of Directors may declare a resignation effective at any time.
Rule 2.9.0 – Dues and Assessments paid by Members
The ASMX charges no Members any Dues or Assessments.
Page 16 | ||
CHAPTER III
ISSUERS OF THE
ALTERNATIVE SECURITIES MARKET EXCHANGE
Rule 3.1.0 – Rights, Privileges and Duties of Alternative Securities Market Exchange Listed Issuers
Unless otherwise stated in the Alternative Securities Market Exchange Rules, each Listed Issuer of the ASMX shall have the same rights, privileges and duties of any other Issuer of the ASMX.
Rule 3.2.0 – Securities Eligible to be issued by Listed Issuers on the Alternative Securities Market Exchange
·
Regulation A: (Primary Securities Class of the ASMX)
Ø
Issued Securities are open to investment by:
§
Accredited Investors
§
ASMX Qualified Investors
§
California Qualified Investors
Ø
No maximum number of non-accredited Investors
Ø
Only U.S. and Canadian Issuers
Ø
General Solicitation allowed
Ø
All of the securities sold in the Regulation A Offering are freely-tradable securities.
Ø
The current exemption allows eligible issuers the right to claim the exemption and raise up to $50 Million in securities in any 12 month period.
Ø
The exemption is not available to entities that:
§
Have one or more class of securities registered under Section 12 of the 1934 Act or which file reports pursuant to Section 15(d) of the 1934 Act;
§
Are not U.S. or Canadian domiciled issuers;
§
Are investment companies;
§
Are blank check companies;
§
Are blind pools or shell companies, or involved in fractional oil / gas interests;
§
Any company where an officer, director, or 10% or more of the stockholders are a “bad boy” under Rule 262 of the 1933 Act or where any such person at a broker-dealer that sells the offering is such a person.
Ø
An Offering under the current Regulation A can be undertaken using any one of three alternative disclosure formats, but, in each instance and at a minimum, Regulation A requires that the Issuer include financial statements that are reviewed, and if the Issuer has audited financial statements, these must be used and the same must conform to the requirement of Article 2 of Regulation S-X of the 1934 Act.
Ø
An Offering under current Regulation A requires that the issuer file the Regulation A Offering Circular with the Securities and Exchange Commission and with the State Securities Commission in each State where the Offering is to take place.
·
Regulation D / Rule 504: (Allowed only if not eligible for Regulation A)
Ø
For Offerings up to $1,000,000 USD, and do not qualify for Regulation A. If determined by the ASMX that the Issuer is eligible for Regulation A, the Issuer will not be allowed to proceed with a Regulation D / 504 Offering on the ASMX.
Ø
Open to only Accredited Investors (no non-accredited Investors)
Ø
General solicitation allowed
Ø
U.S., Canadian and International Issuers
Ø
All of the securities sold in the Regulation D / Rule 504 Offering are freely-tradable securities.
Ø
The exemption is not available to entities that:
§
Are blank check companies;
§
Are subject to the Exchange Act of 1934
Ø
Must comply with Blue Sky Registration Requirements
·
Page 17 | ||
Regulation D / Rule 506: (Allowed only if not eligible for Regulation A)
Ø
For Offerings of $5,000,001 USD to an unlimited maximum.
Ø
For Offerings up to $1,000,001 to $5,000,000 USD, that do not qualify for Regulation A. If determined by the ASMX that the Issuer is eligible for Regulation A, the Issuer will not be allowed to proceed with a Regulation D / 506 Offering on the ASMX.
Ø
Open to only Accredited Investors (no non-accredited Investors)
Ø
General solicitation allowed
Ø
U.S., Canadian and International Issuers
Ø
All of the securities sold in the Regulation D / Rule 506 Offering are restricted from trade for six to twelve months.
Ø
The exemption is not available to entities that:
§
Are blank check companies;
§
Are subject to the Exchange Act of 1934
Ø
Must comply with Blue Sky Registration Requirements
·
California Intra-State Exempt Offering / Rule 1001: (Allowed only if not eligible for Regulation A, and the Company meets the “80/80/80 test below”)
Ø
SEC Rule 1001 provides an exemption from the registration requirements of the Securities Act for offers and sales of securities in amounts of up to $5 Million USD that satisfy the conditions of Section 25102(n) of the California Corporation Code.
Ø
Open to California Qualified Investors and California Accredited Investors ONLY
Ø
Limited General Solicitation
Ø
U.S. Companies that have substantial operations in the State of California (“80/80/80 test”)
§
80% of the Issuer’s gross revenue must be derived from operations with the State of California
§
80% of the proceeds of the Offering must be used for business purposes within the State of California
§
At least 80% of the Issuer’s assets must be located within the State of California.
Ø
Securities issued under this exemption can be resold by registration or an applicable exemption from SEC registration.
Rule 3.3.0 - Procedures for Applying for Listing and Trade on the Alternative Securities Market Exchange
·
Application
Ø
Where to file: A Company seeking Issuer Admission to the ASMX must complete the ASMX Listing Application & Agreement as found at http://www.ASMX.CO and/or http://www.AlternativeSecuritiesMarket.com, or as requested by sending an email to LEGAL@ALTERNATIVESECURITIESMARKET.COM requesting an “ASMX Listing Application & Agreement” document be emailed or mailed by U.S. Mail to the requestor, or by calling (800) 366-0908 and requesting an “ASMX Listing Application & Agreement” be emailed or mailed by U.S. Mail to the requestor.
The Company seeking Listed Issuer Admission to the ASMX must complete the appropriate “ASMX Listing Application & Agreement” and return the completed “ASMX Listing Application and Agreement” and all required documents to the “Market Coordinator Division” of the ASMX.
By Email:
Legal@AlternativeSecuritiesMarket.com
Page 18 | ||
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Market Coordinator
4136 Del Rey Avenue
Marina Del Rey, California 90292
Ø
Decision: After considering an application by an Issuer for Listing on the ASMX, the ASMX shall issue a written decision within ten business days of receiving a completed “ASMX Listing Application & Agreement”, setting forth its findings and conclusions.
Types of Conclusions:
§
“Admitted for Listing and Trade pending qualification” (for Regulation A Only) – Able to issue securities on the ASMX through the Exclusive ASMX Broker Dealer (Alternative Securities Market, LLC) only after SEC Qualification and NASAA State Registration per the “NASAA Coordinated Review and Registration”. Securities are eligible to be purchased by an unlimited number of Accredited and Non-Accredited Investors in the States in which the Securities are registered for sale.
§
“Admitted for Listing and Trade pending SEC Registration” (for Regulation D Only) – Able to issue securities on the ASMX through the ASMX Exclusive Broker-Dealer (Alternative Securities Market, LLC) only after SEC Filing of a Form D and Blue Sky Registration in each State for which Securities will be offered to Accredited Investors. Securities are eligible to be purchased ONLY by Accredited Investors in the States in which the Securities are registered for sale.
§
“Admitted for Listing and Trade pending California Registration” (for California 1001 Intra-State Offerings Only) – Able to issue securities on the ASMX through the ASMX exclusive Broker-Dealer (Alternative Securities Market, LLC) only after California Filing of California Intra-State Exempt Securities Notices and Registrations. Securities are eligible to be purchased ONLY by California Residents who meet the definition of “California Qualified Investor”. Investors from other States are not allowed under any circumstances.
§
“Application Incomplete” – The Listing Applicant will not be approved or denied as additional information is required for the Market Coordinators to make a decision for listing and trade.
§
“Application Denied” – Upon review and consideration by the ASMX, the Market Coordinator has determined that the Applicant does not meet the standards required for listing and trade on the ASMX.
Ø
Appeal: Decisions by the Market Coordinators may be appealed to the ASMX Board of Directors for re-consideration. Requests for Appeals are required to be in writing, and submitted to the ASMX Board of Directors by:
By Email:
Legal@AlternativeSecuritiesMarket.com
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Appeals
4136 Del Rey Avenue
Marina Del Rey, California 90292
Page 19 | ||
Appeals submitted to the Board of Directors will be reviewed by all members of the Board of Directors, and a decision will be issued within 60 days of receipt of the request for re-consideration.
Rule 3.4.0 – Four Tiers of the Alternative Securities Market Exchange
Upon an Issuer being admitted for Listing and Trade on the ASMX, the ASMX will assign the Issuer to one of the four Alternative Securities Market Exchange’s “Four Tiers”:
1)
ASMX Venture Market (Tier I):
a.
U.S. and Canadian Companies Only
b.
Securities are issued pursuant to Regulation A & CA 1001 Offerings
c.
Regulation A Offerings: Open to Accredited and ASMX Qualified Investors
d.
CA1001 Offerings: Limited only to California Qualified Investors
e.
Minimum Initial Public Offering: $100,000
f.
Maximum Initial Public Offering for CA1001: $5,000,000
g.
Maximum Initial Public Offering for Regulation A (Tier I): $20,000,000
h.
Equity, Debt & Convertible Securities
2)
ASMX Main Market (Tier II):
a.
U.S. and Canadian Companies Only
b.
Securities are issued pursuant to Regulation A
c.
Regulation A Offerings: Open to Accredited and ASMX Qualified Investors
d.
Minimum Initial Public Offering: $20,000,001
e.
Maximum Initial Public Offering: $50,000,000
f.
Equity, Debt & Convertible Securities
3)
ASMX Global Private Market (Tier III):
a.
U.S., Canadian and International Companies
b.
Securities are issued pursuant to Regulation D
c.
Regulation D Offerings: Limited to only Accredited Investors
d.
Minimum Initial Public Offering: $1,000,001 (U.S. and Canadian Companies MUST NOT QUALIFY for Regulation A for a listing less than $50,000,000)
e.
Maximum Initial Public Offering: Unlimited
f.
Equity, Debt & Convertible Securities
4)
ASMX Pooled Funds Market (Tier IV):
a.
U.S., Canadian and International Companies
b.
Private Pooled Investment Funds ONLY (Real Estate Funds, Private Equity Funds, Hedge Funds, etc)
c.
Securities are issued pursuant to Regulation D
d.
Regulation D Offerings: Limited to only Accredited Investors
e.
Minimum Initial Public Offering: $5,000,001
f.
Maximum Initial Public Offering: Unlimited
g.
Equity, Debt & Convertible Securities
Rule 3.6.0 – Market Segments of the Alternative Securities Market Exchange
Upon an Issuer being assigned a “Market Tier” for Listing and Trade on the ASMX, the ASMX will also assign the Issuer to one of the Eighteen ASMX “Market Segments”. Companies are placed into a “Market Segment” depending on the Industry in which they operate. Companies can only be listed in one Market Segment, regardless of the number if Industries the Company operates in.
1)
Page 20 | ||
ASMX Aviation & Aerospace Market
2)
ASMX Biofuels Market
3)
ASMX California Water Rights Market
4)
ASMX Commercial Mortgage Clearinghouse
5)
ASMX Energy Market
6)
ASMX Entertainment & Media Market
7)
ASMX Fashion & Textiles Market
8)
ASMX Financial Services Market
9)
ASMX Food and Beverage Market
10)
ASMX Hotel & Hospitality Market
11)
ASMX Life Settlement Market
12)
ASMX Medical Device & Pharmaceuticals Market
13)
ASMX Mining & Mineral Rights Market
14)
ASMX Oil & Natural Gas Market
15)
ASMX Residential Mortgage Clearinghouse
16)
ASMX Restaurant and Nightclub Market
17)
ASMX Retail and E-Commerce Market
18)
ASMX Technologies Market
All Market Segments of the ASMX are part of the ASMX, and are wholly owned and operated by Alternative Securities Market Exchange, Inc.
Each of the above Market Segments has a Closed-end Private Equity Investment Fund associated with it. These funds act much like an “Index Fund”. These Funds are targeted for the Members of the ASMX who wish to participate in ASMX Investments, but choose to passively invest in an “Index” style of a Fund that is Industry Specific, in order to replicate the performance of the particular market segment.
Features:
Ownership:
o
95% Investors that are not management of the Alternative Securities Market Group Corporation, Alternative Securities Market Exchange, Inc., Alternative Securities Market, LLC or a Managing Member of any Company listed on the Market Segment.
o
05% Alternative Securities Markets Group Corporation (Initial Fund Manager)
Board of Directors:
·
Initial three seats, Bylaws allow for up to seven seats. Additional seats require 66 1/3 approval of Common Stock Holders
·
Each Board Seat is for three years, with two of the initial three Board Seat holders being subject to early shareholder vote:
o
Seat One: Up for election within 6 months of Fund making first investment.
o
Seat Two: Up for election at the second annual meeting of Shareholders
o
Seat Three: Up for election at the third annual meeting of Shareholders
o
Seat One: Will be up for second election at the fourth annual meeting of Shareholders.
o
Etc.
Investments:
·
All Shareholders hold Common Stock with the Same Rights and Privileges as the other Shareholders.
·
One Vote per Share of Common Stock on all matters presented to the Shareholders for vote.
·
Fund Manager invests the Fund’s monies into Market Segment Companies per direction from the Fund’s Board of Directors.
·
Board of Directors meet quarterly to determine Fund Investments for the quarter, review financial statements for the Fund and Listed Companies in
Page 21 | ||
the Market Segment, determine any Dividend Payments to Shareholders, and address any other Business submitted to the Board of Directors for Review.
·
Fund Manager & Board of Directors Compensation:
o
Total of 1.00% of Funds under Management (based on an annual figure. Board Members are paid yearly on the date of the Annual Stockholders Meeting, Fund Manager is paid quarterly):
§
Board Member One: .20%
§
Board Member Two: .20%
§
Board Member Three: .20%
§
Fund Investment Manager: .40%
·
Fund Common Stock is able to be resold after any restrictive periods, or restrictive legends have been removed, on the ASMX’s Secondary Market.
Example:
Ø
ASMX Aviation & Aerospace Market has 50 companies listed for Trade.
Ø
Investors seeking great diversification in Alternative Securities Investments in the Aviation & Aerospace Market may choose to invest in multiple companies listed on the Aviation & Aerospace Market Segment, or may choose to simply make a single investment in the “Alternative Securities Markets Group Aviation & Aerospace Market Fund, LLC”, and that investment will be distributed by the Fund Manager into companies listed on the ASMX Aviation & Aerospace Market, as directed by the Fund’s Board of Directors.
Rule 3.5.0 – Investor Reporting Requirements for continued Listing and Trade on the Alternative Securities Market Exchange
In contrast to securities listed on U.S. Stock Exchanges, securities on the ASMX may trade without being registered with the United States Securities & Exchange Commission (much like the “over-the-counter securities markets”).
In order to help Market Members analyze, value and invest on the ASMX, the ASMX has developed THREE MANDATORY INVESTOR REPORTING REQUIREMENT CATAGORIES for Listed Issuers of the ASMX. On each ASMX Listed Issuer’s Company Page, any Member or Market Professional will see whether the Company is:
·
Full Investor Reporting
·
Limited Investor Reporting
·
Non-Investor Reporting (Only companies listed on the Alternative Securities Markets Group Commercial Mortgage Clearinghouse, Alternative Securities Markets Group Residential Mortgage Clearinghouse and the Alternative Securities Markets Group Life Settlement Market, and are issuing only “asset backed / secured debt notes” are allowed to be “non-Investor reporting”). There are no exceptions to this rule.
Three Alternative Securities Market Exchange Mandatory Investor Reporting Requirement Categories:
1)
Full Investor Reporting:
a.
Quarterly Un-audited Financial Statements on SEC Form 1-SA to be emailed to Legal@AlternativeSecuritiesMarket.com within 30 days of the close of each business quarter. Company un-audited financial statements shall be privately distributed to all company investors (not for public view or distribution). All un-audited financial statements will be signed as “true and accurate” by the Chief Executive Officer and/or the Chief Financial Officer.
b.
Page 22 | ||
Annual Audited Financial Statement on SEC Form 1-K to be emailed to Legal@AlternativeSecuritiesMarket.com within 120 days of the close of each business fiscal year. Company audited financial statements shall be privately distributed to all company investors (not for public view or distribution).
c.
Corporate Actions: Certain corporate actions must be disclosed to all Investors no less than TEN calendar days prior to record date. All Corporate Actions will be published on the Company’s Page on the ASMX (www.ASMX.CO and/or www.AlternativeSecuritiesMarket.com):
i.
All Dividends
ii.
Stock Splits
iii.
New Stock Issues
iv.
Reverse Splits
v.
Name Changes
vi.
Mergers
vii.
Acquisitions
viii.
Dissolutions
ix.
Bankruptcies
x.
Liquidations
2)
Limited Investor Reporting:
a.
Quarterly Un-audited Financial Statements on SEC Form 1-SA to be emailed to Legal@AlternativeSecuritiesMarket.com within 30 days of the close of each business quarter. Company un-audited financial statements shall be privately distributed to all company investors (not for public view or distribution). All un-audited financial statements will be signed as “true and accurate” by the Chief Executive Officer and/or the Chief Financial Officer.
b.
Corporate Actions: Certain corporate actions must be disclosed to all Investors no less than TEN calendar days prior to record date. All Corporate Actions will be published on the Company’s Page on the ASMX (www.ASMX.CO and or www.AlternativeSecuritiesMarket.com):
i.
All Dividends
ii.
Stock Splits
iii.
New Stock Issues
iv.
Reverse Splits
v.
Name Changes
vi.
Mergers
vii.
Acquisitions
viii.
Dissolutions
ix.
Bankruptcies
x.
Liquidations
3)
Non-Investor Reporting: (limited to ASMX Residential Real Estate Clearinghouse, ASMX Commercial Mortgage Clearinghouse and ASMX Life Settlement Market transactions where securities are issued as “asset backed / secured debt note” transactions).
a.
Corporate Actions: Certain corporate actions must be disclosed to all Investors no less than TEN calendar days prior to record date. All Corporate Actions will be published on the Company’s Page on the ASMX (www.ASMX.CO and/ or www.AlternativeSecuritiesMarket.com):
i.
Page 23 | ||
All Dividends
ii.
Stock Splits
iii.
New Stock Issues
iv.
Reverse Splits
v.
Name Changes
vi.
Mergers
vii.
Acquisitions
viii.
Dissolutions
ix.
Bankruptcies
x.
Liquidations
Rule 3.6.0 – Revocation of Alternative Securities Market Exchange Listed Issuer from any New Issue or for Resales of Previously Issued Securities on the Alternative Securities Market Exchange’s Secondary Market.
Approved Listed Issuers may issue qualified or exempt securities in approved securities transactions on the ASMX’s Primary Market. Except where determined by the Commission or a Designated Self-Regulatory Organization, the ASMX shall assume the responsibility to monitor the continued qualifications of the securities issued and sold by an issuer on a daily basis. The ASMX reserves the right to suspend or revoke a Listed Issuer of the ASMX at any time the ASMX has reason to believe that the Listed Issuer fails to meet the qualifications of issuing securities on the ASMX. In connection with any suspension or revocation of rights as a Listed Issuer, or the voluntary termination of rights as a Listed Issuer, the Listed Issuer on the ASMX shall be cancelled.
Rule 3.7.0 – Voluntary Termination of Rights as a Listed Issuer:
A Listed Issuer of the ASMX may voluntarily terminate its rights as a Listed Issuer only by a written “Voluntary Delisting Request” addressed to the ASMX’s Secretary.
By Email:
Legal@AlternativeSecuritiesMarket.com
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Delisting
4136 Del Rey Avenue
Marina Del Rey, California 90292
Such Voluntary Delisting Request shall immediately take effect following the receipt of such written Voluntary Delisting Request.
Any Voluntary Delisting Request as a Listed Issuer does not relieve the Issuer from:
·
Any and all indebtedness due the ASMX (Alternative Securities Market Exchange, Inc), Alternative Securities Market, LLC or Alternative Securities Markets Group Corporation;
·
Any ASMX investigation or disciplinary action brought against the Listed Issuer; and
·
Any examination of such Listed Issuer that may be processed.
Page 24 | ||
Rule 3.8.0 – Fees and Charges paid by Listed Issuers
Initial Listing Application Fee:
·
ASMX Venture Market:
$2,000
·
ASMX Main Market:
$2,000
·
ASMX Global Private Market:
$1,500
·
ASMX Pooled Funds Market:
$1,500
Monthly Listed Issuer Fees:
·
ASMX Venture Market
o
Full Investor Reporting:
$249 per month
o
Limited Investor Reporting:
$249 per month
o
Non-Investor Reporting
$249 per month
·
ASMX Main Market
o
Full Investor Reporting:
$449 per month
o
Limited Investor Reporting:
$449 per month
o
Non-Investor Reporting
$449 per month
·
ASMX Global Private Market
o
Full Investor Reporting:
$159 per month
o
Limited Investor Reporting:
$159 per month
o
Non-Investor Reporting
$159 per month
·
ASMX Pooled Funds Market
o
Full Investor Reporting:
$159 per month
o
Limited Investor Reporting:
$159 per month
Alternative Securities Market Exchange Transaction Fees for all Initial Public Offerings:
·
Market Transaction Costs:
1/10th of 1% of all Issuer Sales
Page 25 | ||
CHAPTER IV
RULES OF FAIR PRACTICE
Rule 4.1.0 – Business Conduct of Members and Listed Issuers
All Members & Listed Issuers, in the conduct of their business, shall observe high standard of commercial honor and just and equitable principles of trade.
4.2.0 – Violations Prohibited
No Member, Market Professional or Listed Issuer shall engage in conduct in violation of the Act, the rules or regulations thereunder, the Bylaws, Alternative Securities Market Exchange Rules or any policy or written interpretation of the Bylaws or Alternative Securities Market Exchange Rules, by the Board of Directors or any Committee of the ASMX. Every Member and Listed Issuer shall so supervise persons associated with them as to assure compliance with those requirements.
4.3.0 – Use of Fraudulent Devices
No Member, Market Professional or Listed Issuer shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.
4.4.0 – False Statements
No Member, Market Professional or Listed Issuer, either approved or pending approval, or any person associated with a Member, Market Professional or a Listed Issuer, shall make any false statements or misrepresentations in any application, report or other communications to the ASMX. No Member, Market Professional or Listed Issuer, either approved or pending approval, or any person associated with a Member, Market Professional or a Listed Issuer, shall make any false statement or misrepresentation to any ASMX Committee, Officer, the Board of Directors or any Designated Self-Regulatory organization in connection with any matter within the jurisdiction of the ASMX.
4.5.0 – Advertising Practices
a)
No Member, Market Professional or Listed Issuer, directly or indirectly, in connection with the purchase or sale of any security that has listed or unlisted trading privileges on the ASMX, shall publish, circulate or distribute any advertisement, sales literature or market letter, or make oral or presentations which the Member or Listed Issuer knows, or in the exercise of reasonable know, contain any untrue statement of material fact or which is otherwise false or misleading. Exaggerated or misleading statements or claims are prohibited.
b)
Advertisements, sales literature and market letters shall contain the name of the Member, Market Professional or Listed Issuer, the person or firm preparing the material, if other than the Member, Market Professional or the Listed Issuer, and the date on which it was first published, circulated or distributed (except that in advertisements, only the name of the Member or the Listed Issuer need to be stated).
c)
No cautionary statements or caveats, often called “hedge clauses”, may be used if they could mislead the reader or are inconsistent with the content of the material.
d)
Page 26 | ||
Each item of advertising and sales literature, including any mailers or letters, utilizing the term, or any reference to, “ASMX” or “Alternative Securities Market Exchange”, shall be approved by signature or initial, prior to use, by an Officer of the ASMX.
e)
A separate file of all advertisements, sales literature, and market letters, including the names of the persons who prepared them and/or approved their use, shall be maintained by the Member, Market Professional, or the Listed Issuer for a period of THREE YEARS from the date of each use (for the first TWO YEARS in a place readily accessible to examination or spot checks). Each Member, Market Professional or Listed Issuer shall file with the ASMX, within five business days after initial use, each advertisement (i.e., any material for use in any newspaper, or magazine, or other public media, or by radio, telephone, recording, motion picture or television, except tombstone advertisements), unless such advertisement may be published under the rules of another self-regulatory organization regulating the Member, Market Professional or the Listed Issuer under the Act.
f)
Testimonial material based on experience with the Member, Market Professional or the Listed Issuer, or concerning any advice, analysis, report or other investment related service rendered by the Member, Market Professional or the Listed Issuer must make clear that such testimony is not necessarily indicative of future performance or results obtained by others. Testimonials also shall state whether any compensation has been paid to the maker, directly or indirectly, and if the material implies special experience or expert opinion, the qualification of the maker of the testimonial should be given.
g)
Any statement to the effect that a report, or analysis, or other service will be furnished free or without any charge shall not be made unless such report or analysis, or other service actually is, or will be furnished, entirely free and without condition or obligation.
h)
No claim or implication may be for research or other facilities beyond those which the Member, Market Professional, or the Listed Issuer actually possess or has reasonable capacity to provide.
4.6.0 – The Prompt Receipt and Delivery of Securities
·
Purchases: No Member or Listed Issuer may accept a Member’s purchase of securities until it has first ascertained that the Member, or the Market Professional representing a Member, placing the order, agrees to receive securities in exchange for payment in an amount equal to the execution, even though such execution may represent the purchase of only a part of a larger order.
·
Sales: Any Member or Listed Issuer who accepts payment for Securities must agree to the “Prompt Delivery” of the sold Securities to the Member who purchased the Securities, or to the duly appointed Market Professional of the Member.
4.7.0 – Charges for Services Performed
The ASMX and the Alternative Securities Market Exchange’s Agent’s (Broker-Dealer, Transfer Agent, Collection of money due for the Principal, Dividends or Interest, Appraisals, Safekeeping or Custody of Securities, and other services) shall be reasonable and not unfairly discriminatory among Members, Market Professionals or Listed Issuers.
4.8.0 – Use of Information
A Member, Market Professionals, Listed Issuer, or an Agent for the ASMX, who in their capacity, has received information as to the ownership of securities, shall not make use of such information for soliciting purchases, sales or exchanges except at the request, and on behalf, of the Issuer.
Page 27 | ||
4.9.0 – Payment Designed to Influence Market Prices, Other than Paid Advertising
No Member, Market Professional or Listed Issuer shall directly or indirectly, give, permit to be given, or offer to give anything of value to any person for the purpose of influencing or rewarding the action of such person in connection with the publication or circulation in any newspaper, investment service or similar publication of any matter which has, or is intended to have, an effect upon the market price of any security; provided, that this Rule shall not be construed to apply to a matter which is clearly identifiable as paid advertising.
4.10.0 – Prohibition Against Guarantees
No Member, Market Professional or Listed Issuer shall guarantee, directly or indirectly, a Member against loss in any securities of such Member, Market Professional or Listed Issuer, or in any securities transaction effected by the Member, Market Professional or Listed Issuer.
3.11.0
– Installment or Partial Payment Sales
No Member, Market Professional or Listed issuer shall transfer any securities to any Member where the full payment of the security is to be made by the Member over a period of time in installments or by a series or partial payment under any circumstances.
3.12.0
– Gratuities
No Member, Market Professional or Listed Issuer shall give any compensation or gratuity in any one year in excess of $50.00 to any Officer, Board of Directors Member or Employee of the ASMX.
Page 28 | ||
CHAPTER V
BOOKS AND RECORDS
5.1.0 – Requirements
Each Member, Listed Issuer and Market Professional shall make and keep books, accounts, records, memoranda and correspondence in conformity with Section 17 of the Act and the Rules thereunder, with all other applicable laws and the rules, regulations and statements of policy promulgated thereunder, and with Alternative Securities Market Exchange Rules
5.2.0 – Furnishing of Records
Every Member, Listed Issuer and Market Professional, shall furnish to the ASMX, upon request and in a time and manner required by the ASMX, current copies of any financial information filed with the Commission, as well as any records, files, or financial information pertaining to transactions executed on or through the ASMX. Further, the ASMX shall be allowed access, at any time, to the books and records of any Member, Listed Issuer or Market Professional, in order to obtain or verify information related to transactions executed on or through the ASMX or activities relating to the ASMX.
Consistent with the responsibility of the ASMX and the Commission to provide for timely regulatory investigations, the ASMX has adopted the following general time parameters within which the Members, Listed Issuers and Market Professionals are required to respond to ASMX requests for any Market Data:
First Request …………………………….. Ten Business Days
Second Request ………………………….. Five Business Days
Third Request ……………………...…….. Five Business Days
The second and third request letter will be sent to the Member, Listed Issuer, or the Market Professional via certified mail. Notwithstanding, the parameters listed above, the ASMX reserves the right, in its sole discretion, to require information to be provided more quickly than described above.
5.3.0 – Record of Written Complaints
A.
Each Member, Listed Issuer or Market Professional shall keep and preserve for a period of not less than five years, a file of all written complaints of Members, Listed Issuers and/or Market Professionals, and action taken by the Member, Listed Issuer or Market Professional in respect thereof, if any. Further, for the first two years of the five-year period, the Member, Listed Issuer or Market Professional shall keep such file in a place readily accessible to examination.
B.
A “complaint” shall mean any written statement of a Member, Listed Issuer or Market Professional, or any person acting on behalf of a Member, Listed Issuer or Market Professional, alleging a grievance involving the activities of a Member, Listed Issuer or a Market Professional, or persons under the control of a Member, Listed Issuer or a Market Professional.
Page 29 | ||
CHAPTER VI
SUPERVISION
Rule 6.1.0 – Supervisory Procedures
Each Member, Listed Issuer, and Market Professional, shall maintain and enforce all written Alternative Securities Market Exchange Rules and Procedures, as well as properly supervise the activities of any associated persons of the Member, Listed Issuer and/or Market Professional, to assure their compliance with applicable securities laws, rules, regulations and statements of policy promulgated thereunder, with the rules of the Commission, any designated self-regulatory organization, and where appropriate, with the ASMX.
6.2.0 – Responsibilities of Members, Listed Issuers and Market Professionals
Final responsibility for proper supervision shall rest with the Member, Listed Issuer or the Market Professional. Those Members, Listed Issuers and Market Professionals who utilize services of “Associated Persons” shall establish, maintain and enforce written procedures which will enable the Member, Listed Issuer or Market Professional to properly supervise the activities of its Associated Persons. The Member, Listed Issuer, and /or Market Professional is responsible to ensure that their Associated Person acts in full compliance with applicable securities laws, rules, regulations and statements of policy promulgated thereunder, with the rules of the Commission, any designated self-regulatory organization, and where appropriate, with the ASMX.
6.3.0 – Records
Each Member, Listed Issuer or Market Professional with Associated Persons(s) shall be responsible for keeping appropriate records for carrying out the Member’s, Listed Issuer’s or Market Professional’s Supervisory Procedures.
6.4.0 – Review of Activities
Each Member, Listed Issuer or Market Professional with Associated Person(s) shall review the activities of each Associated Person, which shall include the periodic examination of any accounts and transactions, to detect, prevent irregularities, and safeguard any non-public information.
Page 30 | ||
CHAPTER VII
TRADING RULES
The ASMX is entrusted with the authority to preserve and strengthen the quality and public confidence in Alternative Securities and Alternative Investments. The ASMX stands for Integrity and Ethical practices in order to enhance investor confidence in Alternative Securities and Alternative Investments, thereby contributing to the financial health of the overall economy, and supporting the capital formation process. From the ASMX’s Early and Development Stage Companies, to Operating Companies of International Stature, each are recognized as sharing these important traits that we hold true.
The ASMX, therefore has broad discretionary authority over the initial and continued listing and trade of securities on the ASMX in order to maintain the quality, the public confidence in the ASMX, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest.
The ASMX may use such discretion to deny any application of any Issuer applying for listing for trade, apply additional or more stringent criteria for the initial or continued listing of any securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on the ASMX inadvisable or unwarranted in the opinion of the ASMX, even though the securities meet all enumerated criteria for initial or continued listing on the ASMX..
Rule 7.1.0 – Hours of Trading and Trading Days
A.
Primary Market:
a.
Buying Members, or a Market Professional representing a Buying Member, may enter a “buy side of a subscription agreement” to purchase securities listed for sale by Listed Issuer, or a Market Professional representing a Listed Issuer, 24 hours a day, 7 days a week, 365 days a year.
b.
Selling Listed Issuers may only “accept” or “execute the seller’s side of a Subscription Agreement” During Regular Market Hours on ASMX Business Days.
i.
Regular Market Hours – The term “Regular Market Hours” means the time between 9:00:00 AM and 4:00:00 PM Eastern Standard Time (New York) / 6:00:00 AM and 1:00:00 PM Pacific Standard Time (Los Angeles)
ii.
Business Days are Monday through Friday, except for ASMX recognized Holidays:
1.
New Years Day
2.
Dr. Martin Luther King Day
3.
Presidents Day
4.
Good Friday
5.
Memorial Day
6.
Independence Day
7.
Labor Day
8.
Thanksgiving Day
9.
Christmas Day
iii.
When any holiday observed by the ASMX falls on a Saturday, the ASMX will not be open for business on the preceding Friday. When any holiday observed by the
Page 31 | ||
ASMX falls on a Sunday, the ASMX will not be open for business on the following Monday, unless otherwise indicated by the ASMX.
B.
Secondary Market:
a.
Buying Members, or a Market Professional representing a Buying Member, may enter a “bid” to purchase securities listed for sale by Selling Members 24 hours a day, 7 days a week, 365 days a year.
b.
Selling Members may only “accept” or “decline” a Buying Members “Bid” During Regular Market Hours on ASMX Business Days.
i.
Regular Market Hours – The term “Regular Market Hours” means the time between 9:00:00 AM and 4:00:00 PM Eastern Standard Time (New York) / 6:00:00 AM and 1:00:00 PM Pacific Standard Time (Los Angeles)
ii.
Business Days are Monday through Friday, except for ASMX recognized Holidays:
1.
New Years Day
2.
Dr. Martin Luther King Day
3.
Presidents Day
4.
Good Friday
5.
Memorial Day
6.
Independence Day
7.
Labor Day
8.
Thanksgiving Day
9.
Christmas Day
iii.
When any holiday observed by the ASMX falls on a Saturday, the ASMX will not be open for business on the preceding Friday. When any holiday observed by the ASMX falls on a Sunday, the ASMX will not be open for business on the following Monday, unless otherwise indicated by the ASMX.
7.2.0 – Powers of the Alternative Securities Market Exchange Chief Executive Officer to Halt Trading
The Chief Executive Officer of the ASMX shall have the power to halt or suspend trading in any and all securities traded on the ASMX, to close some or all ASMX facilities, and to determine the duration of any such halt, suspension, or closing, when he or she deems such action necessary for the maintenance of fair and orderly markets, the protection of Investors, or otherwise in the public’s best interest, including special circumstances such as:
·
Actual or threatened physical danger, sever climatic conditions, civil unrest, terrorism, acts of war, or loss of interruption of facilities utilized by the ASMX, or
·
A request by a Governmental Agency or Official, or
·
A period of mourning or recognition for a person or event.
No such action shall continue longer than a period of two days, or as soon thereafter as a quorum of Board of Directors of the ASMX can be assembled, unless the Board of Directors of the ASMX approves the continuation of such suspension.
Page 32 | ||
7.3.0 – Alternative Securities Market Exchange Continuity Plan
The Alternative Securities Market Exchange, Inc., along with the Alternative Securities Market Group Corporation (Parent Company) and Alternative Securities Market, LLC (ASMX Broker-Dealer), each have developed a Business Continuity Plan outlining how each will respond to events that significantly disrupt ASMX business. Since the timing and impact of disasters and disruption is unpredictable, each entity is flexible in responding to actual events as they occur.
Contacting the ASMX – During a significant business disruption, you should be able to contact us as you usually do at (800) 366-0908. Additional contact information for all ASMX Professionals (clearing firms, transfer agents, brokers, advisors, managers, etc) will be continually posted at www.ASMX.CO and / or www.AlternativeSecuritiesMarket.com. If unable to contact the ASMX, you should call any of the firms listed for instruction on how they can provide prompt access to funds and securities, enter any orders and process other trade-related cash and security transactions.
Alternative Securities Market Exchange Business Continuity Plan – The ASMX, the Alternative Securities Markets Group Corporation, and the Alternative Securities Market, LLC each plan to quickly recover and resume business operations after a significant business disruption by safeguarding each Firm’s Employees and Property, making a financial and operational assessment, protecting each Firm’s Books and Records, and allowing our Members, Listed Issuers, Market Professionals to transact business. In short, each Firm’s Business Continuity Plan is designed to permit each Firm to resume operations as quickly as possible, subject to the score and severity of the significant business disruption.
Each Firm’s Business Continuity Plan addresses data back-up and recovery; all mission critical systems, financial and operational assessments; alternative communications with customers, employees, and regulators; alternative location of employees; critical supplier, contractor, bank and counter-party impact; regulatory reporting; and assuring our Members, Listed Issuers and Market Professionals prompt access to any funds and securities if the ASMX is unable to continue business.
Stock Transfer Agents and Clearing Firms associated with the ASMX each backup records in geographically separate areas from the ASMX. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, each Firm has been advised by each of its Market Professionals, that their internal objective is to restore their own operations and be able to complete existing transactions and accept new transactions and payments within a timely manner. Any Member, Listed Issuer and Market Professional’s orders and requests for funds and securities could be delayed during this period.
Varying Disruptions – Significant business disruptions can vary in their scope, whether it affects only the ASMX, a single building housing the ASMX, the business district where the ASMX is located, the City where the ASMX is located, or an entire region. Within each of these areas, the severity of the disruption can vary from minimal to severe. In a disruption to only the ASMX or a building housing the ASMX, ASMX Management will transfer its operations to a local site when needed and expect to recover and resume ASMX business within one day. In a disruption affecting the Business District where the ASMX is located, or a the city or region, ASMX Management will transfer operations to a site outside of the affected area, and recover and resume ASMX business within one day. In both cases, the ASMX plans to continue in business and post pertinent information on our websites at www.ASMX.CO and www.AlternativeSecuritiesMarket.com. If the significant business disruption is so severe that it prevents the ASMX from remaining in business, the ASMX will facilitate all Members’, Listed Issuers’ and Market
Page 33 | ||
Professionals’ prompt access to their funds and securities as necessary.
7.4.0 – Securities Eligible for Trading
The ASMX has designated the following securities for Trading on the ASMX.
Ø
Regulation A: (Primary)
§
Issued Securities are open to investment by:
o
Accredited Investors
o
ASMX Qualified Investors
o
California Qualified Investors
§
No maximum number of non-accredited Investors
§
Only U.S. and Canadian Issuers
§
General Solicitation allowed
§
All of the securities sold in the Regulation A Offering are freely-tradable securities.
§
The current exemption allows eligible issuers the right to claim the exemption and raise up to $50 Million in securities in any 12 month period.
§
The exemption is not available to entities that:
o
Have one or more class of securities registered under Section 12 of the 1934 Act or which file reports pursuant to Section 15(d) of the 1934 Act;
o
Are not U.S. or Canadian domiciled issuers;
o
Are investment companies;
o
Are blank check companies;
o
Are blind pools or shell companies, or involved in fractional oil / gas interests;
o
Any company where an officer, director, or 10% or more of the stockholders are a “bad boy” under Rule 262 of the 1933 Act or where any such person at a broker-dealer that sells the offering is such a person.
§
An Offering under the current Regulation A can be undertaken using any one of three alternative disclosure formats, but, in each instance and at a minimum, Regulation A requires that the Issuer include financial statements that are reviewed, and if the Issuer has audited financial statements, these must be used and the same must conform to the requirement of Article 2 of Regulation S-X of the 1934 Act.
§
An Offering under current Regulation A requires that the issuer file the Regulation A Offering Circular with the Securities and Exchange Commission and with the State Securities Commission in each State where the Offering is to take place.
Ø
Regulation D / Rule 504: (Allowed only if not eligible for Regulation A)
§
For Offerings up to $1,000,000 USD, and do not qualify for Regulation A. If determined by the ASMX that the Issuer is eligible for Regulation A, the Issuer will not be allowed to proceed with a Regulation D / 504 Offering on the ASMX.
§
Open to only Accredited Investors (no non-accredited Investors)
§
General solicitation allowed
§
U.S., Canadian and International Issuers
§
All of the securities sold in the Regulation D / Rule 504 Offering are freely-tradable securities.
§
The exemption is not available to entities that:
o
Are blank check companies;
o
Are subject to the Exchange Act of 1934
§
Must comply with Blue Sky Registration Requirements
Ø
Regulation D / Rule 506: (Allowed only if not eligible for Regulation A)
§
For Offerings of $5,000,001 USD to an unlimited maximum.
§
Page 34 | ||
For Offerings up to $1,000,001 to $5,000,000 USD, that do not qualify for Regulation A. If determined by the ASMX that the Issuer is eligible for Regulation A, the Issuer will not be allowed to proceed with a Regulation D / 506 Offering on the ASMX.
§
Open to only Accredited Investors (no non-accredited Investors)
§
General solicitation allowed
§
U.S., Canadian and International Issuers
§
All of the securities sold in the Regulation D / Rule 506 Offering are restricted from trade for six to twelve months.
§
The exemption is not available to entities that:
o
Are blank check companies;
o
Are subject to the Exchange Act of 1934
§
Must comply with Blue Sky Registration Requirements
Ø
California Intra-State Exempt Offering / Rule 1001: (Allowed only if not eligible for Regulation A, and the Company meets the “80/80/80 test below”)
§
SEC Rule 1001 provides an exemption from the registration requirements of the Securities Act for offers and sales of securities in amounts of up to $5 Million USD that satisfy the conditions of Section 25102(n) of the California Corporation Code.
§
Open to California Qualified Investors and California Accredited Investors ONLY
§
Limited General Solicitation
§
U.S. Companies that have substantial operations in the State of California (“80/80/80 test”)
o
80% of the Issuer’s gross revenue must be derived from operations with the State of California
o
80% of the proceeds of the Offering must be used for business purposes within the State of California
o
At least 80% of the Issuer’s assets must be located within the State of California.
§
Securities issued under this exemption can be resold by registration or an applicable exemption from SEC registration.
7.5.0 – Registration of Members, Market Professionals & Associated Persons
Registration of Members and Market Professionals –
o
Access by Application:
·
Each person has completed the appropriate investor suitability questionnaire and supplied copies of the appropriate documents as required; or
·
Each entity has completed the appropriate institutional suitability questionnaire and supplied copies of the appropriate documents as required.
·
Each person or entity must agree to the ASMX’s examination of such person’s or entity’s books and records as required by the ASMX, and to agree to allow the ASMX to verify the accuracy of any information so supplied; and
o
Each person or entity must agree to be regulated by the ASMX and to recognize that the ASMX is obligated to undertake to enforce compliance with the provisions of the Alternative Securities Market Exchange Rules, the Corporation Bylaws, the interpretations and policies of the ASMX and the provisions of the Act and the regulations thereunder.
o
Access Granted without Application:
·
All Members of the Commission or any Governmental or Self-Regulating Organization(s)
·
Banks
·
Insurance Company
·
Page 35 | ||
State & SEC Registered Investment Advisors
·
Registered Investment Companies
·
Business Development Company
·
Small Business Development Company
·
Employee Benefit Plan with $5Million USD
·
Any public reporting Company or Investment Fund with assets greater than $5Million USD.
·
Transfer Agent
·
Clearing Firm
·
Registered Broker-Dealer
7.7.0 – Types of Access to the Alternative Securities Market Exchange
o
General Access – The ASMX Website (http://www.ASMX.CO and/or http://www.AlternativeSecuritiesMarket.com), shall be open for general browsing and reviewing of information to all browsers. No User Name or Passwords required.
o
Limited Listed Issuer Access (Issuer Portal Only – The ASMX Website (http://www.ASMX.CO and/or http://www.AlternativeScuritiesMarket.com), allows for Issuers to have limited access as a “Non-Investing Party” to access information on Subscription Agreements. Limited Listed Issuer Access will have no ability to purchase securities, list Asks, or Bid on Securities.
o
Limited Member Portal Access (Primary & Secondary Market) – The ASMX Website (http://www.ASMX.CO and / or http://www.AlternativeSecuritiesMarket.com), allows Members and Market Professionals “Limited Access to Investor Portals”
Limited Access means that a Member qualified as an “Accredited Investor”, an “ASMX Qualified Investor” or a “California Qualified Investor”, and has been issued the rights to have access to “Bid” or “Subscribe” to any investment that is offered to Accredited Investors, ASMX Qualified Investors, and/or California Qualified Investors.
A Member qualified as an “ASMX Qualified Investor” may only have access to investment opportunities open to ASMX Qualified Investors, and would not have access to investment opportunities limited to Accredited Investors.
NOTE: Some securities, especially those of Listed Issuers, may have state restrictions. Meaning, a security open to investment by ASMX Qualified Investors residing in New York State, many not be available to ASMX Qualified Investors who reside in the State of South Carolina, due to the fact the securities have not been registered for sale in the State of South Carolina. In this instance, the ASMX Qualified Investor from South Carolina would not be allowed to “subscribe” to the Listed Issuer’s securities.
Limited Member Portal Access Types:
a.
Accredited Investor –
i.
Primary Market (Buy Side) - Able to complete Buyer Side of Subscription Agreements for securities listed for sale by Listed Issuers, and open to investment by Accredited Investors (State Restrictions may apply).
1.
Proof of funds must be presented to the ASMX prior to any acceptance by the Listed Issuer.
ii.
Secondary Market (Buy Side) - Able to post “Bids” for securities posted for sale by Members of the ASMX for Companies listed for trade on the ASMX.
1.
Proof of funds to close the transaction must be presented to the ASMX prior to any acceptance by the Selling Member.
iii.
Page 36 | ||
Secondary Market (Sell Side) - Able to post “Asks” for the sale of un-restricted securities to Members and Market Professionals of the ASMX.
1.
Proof of ownership of the securities, and their ability to be resold must be verified by the ASMX prior to the publishing of any “Ask” by any Member or Market Professional.
2.
Securities posted for sale on the ASMX MUST be ONLY for Companies listed for trade on the ASMX. No “Ask” for Securities for any Company not listed on the ASMX will be published.
b.
ASMX Qualified Investor –
i.
Primary Market (Buy Side) - Able to complete Buyer Side of Subscription Agreements for securities listed for sale by Listed Issuers, and open to investment by ASMX Qualified Investors (State Restrictions may apply).
1.
Proof of funds must be presented to the ASMX prior to any acceptance by the Listed Issuer.
ii.
Secondary Market (Buy Side) - Able to post “Bids” for securities posted for sale by Members of the ASMX for Companies listed for trade on the ASMX.
1.
Proof of funds to close the transaction must be presented to the ASMX prior to any acceptance by the Selling Member.
iii.
Secondary Market (Sell Side) - Able to post “Asks” for the sale of un-restricted securities to Members and Market Professionals of the ASMX.
1.
Proof of ownership of the securities, and their ability to be resold must be verified by the ASMX prior to the publishing of any “Ask” by any Member or Market Professional.
2.
Securities posted for sale on the ASMX MUST be ONLY for Companies listed for trade on the ASMX. No “Ask” for Securities for any Company not listed on the ASMX will be published.
c.
California Qualified Investor –
i.
Primary Market (Buy Side) - Able to complete Buyer Side of Subscription Agreements for securities listed for sale by Listed Issuers, and open to investment by California Qualified Investors.
1.
Proof of funds must be presented to the ASMX prior to any acceptance by the Listed Issuer.
ii.
Secondary Market (Buy Side) - Able to post “Bids” for securities posted for sale by Members of the ASMX for Companies listed for trade on the ASMX.
1.
Proof of funds to close the transaction must be presented to the ASMX prior to any acceptance by the Selling Member.
iii.
Secondary Market (Sell Side) - Able to post “Asks” for the sale of un-restricted securities to Members and Market Professionals of the ASMX.
1.
Proof of ownership of the securities, and their ability to be resold must be verified by the ASMX prior to the publishing of any “Ask” by any Member or Market Professional.
2.
Securities posted for sale on the ASMX MUST be ONLY for Companies listed for trade on the ASMX. No “Ask” for Securities for any Company not listed on the ASMX will be published.
d.
Non-Investment Related Agents –
i.
Access to the ASMX will be granted on an “as-needed” basis to Agents (generally; Members of the Commission, Governmental Enforcement and Regulatory Bodies, Transfer Agents, Clearing Firms, etc):
1.
Primary Market (Buy Side) – Un-able to complete Buyer Side of Subscription Agreements for securities listed for sale by Listed Issuers.
2.
Secondary Market (Buy Side) – Un-able to post “Bids” for securities posted for sale by Members of the ASMX for Companies listed for trade on the ASMX.
3.
Page 37 | ||
Secondary Market (Sell Side) – Un-able to post “Asks” for the sale of un-restricted securities to Members and Market Professionals of the ASMX.
e.
Associated Persons –
i.
Associated Persons are granted the same authority as the Members, Listed Issuer or Market Professional that the Associated Person is associated with, UNLESS a request in writing is received by the Member, Listed Issuer or Market Professional to limit the access of the Associated Person to that of a “Non-Investment Related Agent”.
7.7.0 – Execution of Investments
A.
Primary Market:
a.
All Sales of Securities on the ASMX - Primary Market are between an ASMX “Listed Issuer” (seller) and an ASMX “Investing Member” (buyer).
i.
The exclusive Broker-Dealer for all Listed Issuer Securities sold on the ASMX is “Alternative Securities Market, LLC”.
ii.
After completion of the Listed Issuer’s Securities Qualification and/or Securities Registration, the Alternative Securities Market, LLC will post the securities available for sale on the Primary Market of the ASMX.
1.
Information provided:
a.
General Company Information of the Issuer
b.
Corporate Officer Name(s) and Contacts of Issuer
c.
Issuer Address, Phone Number, Email Address and Website
d.
Contact for any Legal Counsel or Accountant for Issuer
e.
Broker-Dealer Information
f.
SEC CIK Number for Issuer
g.
Any ISIN Number for Issuer
h.
Link to SEC Edgar Filer Information for Issuer
i.
Copies of any Securities Qualifications or Securities Registrations for Issuer (Federal and/or State).
j.
Copies of any Registrations Statement, Prospectus and/or Offering Memorandum for Issuer
k.
Type of Reporting of the Issuer
i.
Full Investor Reporting
ii.
Limited Investor Reporting
iii.
Non-Investor Reporting
l.
Terms of Offering:
i.
Corporation Type of Issuer
ii.
Type of Securities Issued (Common Stock, Preferred Stock, Debt Note, etc.)
iii.
Registration Exemption of Securities Issue
1.
Regulation A
2.
Regulation D / Rule 504
3.
Regulation D / Rule 506
4.
California Rule 1001
iv.
State(s) in which the Offering is available to Investors
v.
All Resale Trade Restrictions (30 to 365 days)
vi.
Number of Units (Securities) being sold in Offering
vii.
Price per unit of securities being issued
m.
Online Investment Subscription Agreement (Coded to only allow for access by ASMX Members who are authorized “Accredited Investors”, “ASMX Qualified Investors” or
Page 38 | ||
“California Qualified Investors” who qualify to purchase the securities being issued, and are residents of a state in which the Offering is able to be sold).
n.
Details as to the Number of Units sold, and the Number of Units remaining to be purchased.
b.
A Member wishing to purchase securities Issued by a Listed Issuer, the Investing Member or a Market Professional representing the Investing Member can click on the “Invest” tab on the Listed Issuer’s Company Page on the ASMX.
c.
After clicking on the “Invest” tab on the Listed Issuer’s Company page, the Investing Member, or Market Professional representing the Investing Member, will be prompted to enter their ASMX “Username” and “Password”.
d.
After successfully inputting the correct ASMX “User Name” and “Password”, the ASMX Online System will verify that the credentials of the Investing Member, or Market Professional representing an Investing Member, is eligible to invest in the selected Offering (Accredited Investor, ASMX Qualified Investor or California Qualified Investor).
i.
If eligible to invest in the Offering, the Subscription Agreement will open online, for the Investing Member or Market Professional representing the Member, to complete the “Buyer Side” of the Subscription Agreement.
ii.
If ineligible to invest in the Offering (not the proper class of Investing Member or the securities are not eligible for sale in the State that the Member is a resident), the Member or Market Professional requesting access to the subscription agreement will not be granted access to the Subscription Agreement.
e.
Once the Listed Issuer Subscription Agreement is open Online, the Investing Member or Market Professional representing an Investment Member, shall be able to review the entire Subscription Agreement Online, and complete all Mandatory Fields of the Online Subscription Agreement that are required to submit the Subscription Agreement for review and consideration by the Listed Issuer. Required Information on the Subscription Agreement for an Investing Member:
i.
Number of Units to be purchased by Investing Member, and the aggregate purchase price of all Units being purchased by the Investing Member.
ii.
Date Executed by Investing Member or Market Professional representing an Investing Member.
iii.
Alternative Securities Market Exchange Account Number – The ASMX Account Number is a unique 6 to 10 digit account number assigned to each ASMX Member and Market Professional. This number will auto-populate the Investor Suitability and Contact information portion of each Online Subscription Agreement. It is not possible to complete a Buy Side of a Subscription Agreement without a valid ASMX Account Number.
f.
After completing the Buyers Side of the Online Subscription Agreement, the Investing Member, or Market Professional representing the Investing Member, will receive information via email on the steps required to verify funds required to close the transaction (Generally, this only happens during Regular Market Hours on ASMX Business Days. Since this is not an automated function of the ASMX, it is possible that a reply from an authorized member of the ASMX with instructions on how to submit for funds verification may be received during Non-Regular Market Hours or on Non- ASMX Business Days).
g.
After verification of funds required to close the transaction, the ASMX will process the Buyer Side of the Completed Online Subscription Agreement over to the Alternative Securities Market, LLC (Issuer Broker-Dealer) and the Listed Issuer for review and acceptance (the Listed Issuer can decline to accept any Investment from any Investing Member without cause or reason).
h.
If the Subscription Agreement is ACCEPTED by the Listed Issuer, the Investing Member or Market Professional will receive a completed (fully executed) Subscription Agreement
Page 39 | ||
emailed to them, signed by an authorized principle of the Listed Issuer, with instructions of how to Wire or Mail Investor Funds.
i.
Upon receipt of “Cleared Bank Funds”, the Listed Issuer or Alternative Securities Market, LLC will promptly forward “Verification and Receipt of Cleared Investment Funds” and promptly forward the purchased securities to the Investing Member or Market Professional representing the Invested Member. The Alternative Securities Market, LLC will comply with all State and/or Federal Reporting and Registrations (as required), and confirmation will be forwarded to both Listed Issuer, Invested Member, and /or Market Professional representing Invested Member.
j.
ALTERNATIVE SECURITIES MARKET EXCHANGE TRADE RESTRICTION FOR ALL SECURITIES PURCHASED ON THE ALTERNATIVE SECURITIES MARKET EXCHANGE - PRIMARY MARKET – ALL SECURITIES PURCHASED FROM A LISTED ISSUER ON THE PRIMARY MARKET ARE RESTRICTED FROM ANY RESALE ON THE ALTERNATIVE SECURITIES MARKET EXCHANGE – SECONDARY MARKET FOR A PERIORD OF A MINIMUM OF THIRTY DAYS, BUT NOT GRATER THAN 365 DAYS.
B.
Secondary Market:
a.
All Sales of Securities on the Alternative Securities Market Exchange - Secondary Market are between an ASMX “Selling Member” (seller) and an ASMX “Buying Member” (buyer).
i.
All Broker-Dealers, ASMX Members and Market Professionals may access the Secondary Market, post an “Ask” to sell securities, review all “Asks” posted, and post “Bids” to buy securities, as well as review all bids posted by other Members or Market Professionals.
1.
Ask – The term “Ask” is a written indication by a Selling Member, or a Market Professional representing a Selling Member, of a willingness to sell a security of an ASMX Listed Company, and the price at which the Selling Member is willing to sell the security for.
2.
Bid – The term “Bid” is an indication by a Buying Member, or a Market Professional representing a Buying Member, of a willingness to buy a security, and the price at which the Buying Member is willing to buy the security for.
ii.
The ASMX is an “Auction Market” - The term “Auction Market”, is a market in which Buying Members, or a Market Professional representing a Buying Member, enter competitive bids, and Selling Members, or a Market Professional representing a Selling Member, enter competitive offers simultaneously.
b.
A Selling Member, or a Market Professional representing a Selling Member, may use their ASMX “username” and “password” to access the ASMX – Secondary Market. NOTE: No Non-Member of the ASMX is able to access the ASMX – Secondary Market.
c.
Posting an ASK –
i.
A Selling Member, or a Market Professional representing a Selling Member, logs into the ASMX – Secondary Market.
ii.
A Selling Member, or a Market Professional representing a Selling Member, Clicks on “Post an Ask”
iii.
A Selling Member, or a Market Professional representing a Selling Member, inputs the mandatory fields required to Post and Ask
1.
Name of the Issuer / Company
2.
Any Broker-Dealer representing the Selling Shareholder (none is required, but is recommended)
3.
Type of Securities Listing for sale (Common Stock, Preferred Stock, Debt Note, etc).
4.
Are there Restricted Legends associated with the Securities being listed for sale:
a.
Yes, there are restricted legends associated with the Securities.
b.
Page 40 | ||
No, the Securities have either been issued free of restricted legends, or the restricted legends have been removed.
5.
The “Minimum Bid Price” is the cash selling price the Selling Member will accept for the Securities listed for sale (the Minimum Bid Price is not published for view), and the “Listed Ask Price” is the cash selling price the Selling Member will sell the securities if a Buying Member is willing to purchase the securities for (the Listed Ask Price is published and viewable to all Secondary Market participants).
6.
NOTE: Any Selling Member, or Market Professional representing a Selling Member, may choose “No Listed Ask Price”, and will not have a cash price at which Bids are automatically accepted, and all bids will be compiled during the Auction, and shares will be sold to the “Highest Bidders above the Minimum Bid Price”. All Bids below the “Minimum Bid Price” will not be accepted by the Selling Member.
iv.
After inputting the information for the “Ask”, the Selling Member, or Market Professional representing the Selling Member, will be required to present information to the ASMX that the Selling Member is the rightful owner of the Securities being offered for sale, and that the Securities are free to be offered for sale.
v.
After verifying that the Securities qualify for listing and sale on the ASMX – Secondary Market, the ASMX will “Accept the Ask”, and it will be put in the “Ask” in Que for the Start of the Next Secondary Market Auction.
vi.
Secondary Market Auctions:
1.
All Auctions start at 11:00:00 AM EST / 8:00:00 AM PST each ASMX Business Day.
2.
All Auctions end at 10:59:59 AM EST / 7:59:59 AM PST the NEXT ASMX Business Day (some auctions last 24 hours, some auctions can last for days).
3.
Buying Members can post “Bids” for the full duration of the Auction.
a.
All Bids entered by Buying Members, or Market Professionals representing a Buying Member, are published for view by any Member or Market Professional accessing the ASMX - Secondary Market. Buying Members, and/or Market Professional representing a Buying Member, suspected of placing Bids for the purpose of creating or inducing a false, misleading or artificial appearance of activity in a Bid, or for the purpose of unduly or improperly influencing the market price for such security, or for the purpose of establishing a price which does not reflect the true state of the market in such security, may have their Memberships Suspended, Revoked or Terminated. (See Chapter VIII)
4.
Bids to Sales:
a.
All Bids for the “Listed Ask Price” are automatically accepted.
i.
If during Regular Market Hours on an ASMX Day, all Bids for the “Listed Ask Price” are automatically accepted and final, and those securities are removed from that Secondary Market Auction.
ii.
If during After Market Hours or on Non- ASMX Business Days, all Bids at the “Listed Ask Price” are automatically accepted at the opening of the next ASMX Business Day. If more Listed Ask Price Bids are received than the number of securities available, the ASMX will accept the Listed Ask Price Bids with the earliest received time stamp.
b.
Page 41 | ||
All Bids above the “Minimum Bid Price”, after all “Listed Ask Price” securities have been deducted from the securities available for auction (if any):
i.
At the end of the Auction:
1.
If the number of Bids above the Minimum Bid Price exceeds the number of Securities Listed for sale, then only the bids for the most money per share will be accepted, and all other bids will be rejected. This is called “Full Lot Sale”
2.
If the number of Securities available for sale is greater than the Bids above the Minimum Bid Price, all of the Bids above the Minimum Sales Price will be accepted, and all other Bids rejected. This is called “Partial Lot Sale”.
5.
After completion of the Auction,
a.
Selling Members, and/or Market Professionals representing the Selling Member, receive an email from the ASMX with the results of the Auction.
i.
Number of Units Sold
ii.
Price Each Unit Sold For
iii.
Buying Member Contact Information
iv.
Sell Side Agreement for execution
b.
Buying Members, and/or any Market Professionals representing the Buying Member, with accepted Bids receive an email from the ASMX with details of how to complete the securities purchase transaction.
i.
Number of Units being purchased
ii.
Price purchasing each Unit for
iii.
Selling Member Contact Information
iv.
Buy Side Agreement for execution
v.
Instruction for where to wire funds or mail a check for the purchase of the securities purchased
d.
Upon receipt of “Cleared Bank Funds”, the Selling Member or Alternative Securities Market, LLC will promptly forward “Verification and Receipt of Cleared Buy Funds” and promptly forward the purchased securities to the Buying Member or Market Professional representing the Invested Member. If the Alternative Securities Market, LLC was the Broker for the transaction, the Alternative Securities Market, LLC will comply with all State and/or Federal Reporting and Registrations (as required), and confirmation will be forwarded to both Selling Member, Buy Member, and /or Market Professional representing the Selling or Buying Member.
e.
Failed Transaction – Buy Side - Any transaction without Cleared Bank Funds being sent to the Selling Member with TEN ALTERNATIVE SECURITIES BUSINESS DAYS shall result in the Buying Members ASMX access being suspended or revoked. Any illegal action will be dealt with swiftly and the violators will be reported to the appropriate authorities.
f.
Failed Transaction – Sell Side – Any transaction where a Buying Member has sent Cleared Bank Funds to the Selling Member, and has not received a confirmation of receipt of Cleared Bank Funds or the securities purchased, shall immediately have their ASMX access suspended or revoked. Any illegal action will be dealt with swiftly and the violators will be reported to the appropriate authorities.
g.
ALTERNATIVE SECURITIES MARKET EXCHANGE TRADE RESTRICTION FOR ALL SECURITIES PURCHASED ON THE ALTERNATIVE SECURIITIES MARKET - SECONDARY MARKET – ALL SECURITIES PURCHASED FROM A SELLING MEMBER ON THE SECONDARY MARKET ARE RESTRICTED FROM ANY RESALE
Page 42 | ||
ON THE ALTERNATIVE SECURITIES MARKET EXCHANGE FOR A PERIOD OF 30 DAYS.
7.8.0 – Trade Reporting
The ASMX shall cause to be disseminated for publication on the “ASMX Consolidated Market Activity Report”, the sale price of all transactions on the ASMX pursuant to the requirements of an effective transactions reporting plan approved by the Board of Directors.
To facilitate the dissemination of the ASMX Consolidated Market Activity Report, each Member, Listed Issuer, Market Professional shall cause to be reported to the ASMX, as promptly as possible after completion of all transactions, all information each transaction required by the ASMX Consolidated Market Activity Report.
An Official of the ASMX shall approve any corrections to reports published in any single day’s ASMX Consolidated Market Activity Report. Any such correction shall be made within one day after detection of any failed transaction or reporting error.
7.9.0 – Execution of Investments
A.
NEITHER THE ALTERNATIVE SECURITIES MARKET EXCHANGE NOR ITS AGENTS, EMPLOYEES, CONTRACTORS, OFFICERS, DIRECTORS, SHAREHOLDERS, COMMITTEE MEMBERS OR AFFILIATES (“ALTERNATIVE SECURITIES MARKET EXCHANGE RELATED PERSONS”) SHALL BE LIABLE TO ANY USER, MEMBER, LISTED ISSUER, MARKET PROFESSIONAL, OR SUCCESSORS, REPRESENTATIVES OR CUSTOMERS THEREOF, OR ANY PERSONS ASSOCIATED THEREWITH, FOR ANY LOSS, DAMAGES, CLAIM OR EXPENSE:
a.
GROWING OUT OF THE USE OR ENJOYMENT OF ANY FACILITY OF THE ALTERNATIVE SECURITIES MARKET EXCHANGE, INCLUDING, WITHOUT LIMITATION, THE ALTERNATIVE SECURITIES MARKET EXCHANGE SYSTEMS; OR
b.
ARISING FROM OR OCCASIONED BY ANY INACCURACY, ERROR OR DELAY IN, OR OMISSION OF, OR FROM THE COLLECTION, CALCULATION, COMPILATION, MAINTENANCE, REPORTING OR DISSEMINATION OF ANY INFORMATION DERIVED FROM THE SYSTEM OR ANY OTHER FACILITY OF THE ALTERNATIVE SECURITIES MARKET EXCHANGE, RESULTING EITHER FROM ANY ACT OR OMISSION BY THE ALTERNATIVE SECURITIES MARKET EXCHANGE OR ANY ALTERNATIVE SECURITIES MARKET EXCHANGE RELATED PERSON, OR FROM ANY ACT CONDITION OR CAUSE BEYOND THE REASONABLE CONTROL OF THE ALTERNATIVE SECURITIES MARKET EXCHANGE OR ANY ALTERNATIVE SECURITIES MARKET EXCHANGE RELATED PERSON, INCLUDING, BUT NOT LIMITED TO, FLOOD, EXTRAORDINARY WEATHER CONDITIONS, EARTHQUAKE OR OTHER ACTS OF GOD, FIRE, WAR, TERRORISM, INSURRECTION, RIOT, LABOR DISPUTE, ACCIDENT, ACTION OF GOVERNMENT, COMMUNICATIONS OR POWER FAILURE, OR EQUIPMENT OR SOFTWARE MALFUNCTION.
B.
EACH MEMBER, LISTED ISSUER AND MARKET PROFESSIONAL EACH EXPRESSLY AGREES, IN CONSIDERATION OF THE ISSUANCE OF ITS MEMBERSHIP IN THE ALTERNATIVE SECURITIES MARKET EXCHANGE, TO RELEASE AND DISCHARGE THE ALTERNATIVE SECURITIES MARKET EXCHANGE AND ALL ALTERNATIVE SECURITIES MARKET RELATED PERSONS OF AND FROM ALL CLAIMS AND DAMAGES ARISING
Page 43 | ||
FROM THEIR ACCEPTANCE AND USE OF THE FACILITIES OF THE ALTERNATIVE SECURITIES MARKET EXCHANGE (INCLUDING, WITHOUT LIMITATION, ALL SYSTEMS OF THE ALTERNATIVE SECURITIES MARKET EXCHANGE).
C.
NEITHER THE ALTERNATIVE SECURITIES MARKET EXCHANGE NOR ANY ALTERNATIVE SECURITIES MARKET EXCHANGE RELATED PERSON MAKE ANY EXPRESS OR IMPLIED WARRANTIES OR CONDITIONS TO ANY MEMBER, LISTED ISSUER OR MARKET PROFESSIONAL, AS TO RESULTS THAT ANY PERSON OR PARTY MAY OBTAIN FROM THE ALTERNATIVE SECURITIES MARKET EXCHANGE SYSTEMS FOR TRADING OR FOR ANY OTHER PURPOSE, AND ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, TITLE, AND NON-INFRINGEMENT WITH RESPECT TO THE ALTERNATIVE SECURITIES MARKET EXCHANGE SYSTEMS ARE HEREBY DISCLAIMED.
Page 44 | ||
CHAPTER VIII
TRADING PRACTICE RULES
Rule 8.1.0 – Market Manipulation
No Member, Listed Issuer or Market Professional shall execute, or cause to be executed, or participate in transaction which there are executed purchases of any security at successively higher prices, for the purpose of creating or inducing a false, misleading or artificial appearance of activity in such security on the ASMX, or for the purpose of unduly or improperly influencing the market price for such security or for the purpose of establishing a price which does not reflect the true state of the market for such security.
Rule 8.2.0 – Fictitious Transactions
No Member, Listed Issuer or Market Professional, for the purpose of creating or inducing a false or misleading appearance of activity in a security traded on either the Primary Market or the Secondary Market, or for creating or inducing a false or misleading appearance with respect to the market in such security shall “Engage in any transaction in which the Member, Listed Issuer or Market Professional has no true intention in engaging in a transaction that involves a change in the beneficial ownership of a security per the terms or any Offer, Subscription Agreement, Bid or Ask.”
Rule 8.3.0 – Manipulative Transactions
A.
No Member, Listed Issuer or Market Professional shall participate or have any interest, directly or indirectly, in the profits of a manipulative operation, or knowingly manage or finance manipulative operations.
B.
Any pool or syndicate organized or used intentionally for the purpose of unfairly influencing the market price or a security shall be deemed to be a manipulative operation.
Rule 8.4.0 – Dissemination of False Information
No Member, Listed Issuer or Market Professional shall make any statement or circulate and disseminate any information concerning any security traded on the ASMX which such Member, Listed Issuer or Market Professional knows, or has reasonable grounds for believing is false or misleading, or would improperly influence the market price of such security.
8.5.0 – Trade Reporting
The ASMX shall cause to be disseminated for publication on the “ASMX Consolidated Market Activity Report”, the sale price of all transactions on the ASMX pursuant to the requirements of an effective transactions reporting plan approved by the Board of Directors.
Page 45 | ||
To facilitate the dissemination of the ASMX Consolidated Market Activity Report, each Member, Listed Issuer, Market Professional shall cause to be reported to the ASMX, as promptly as possible after completion of all transactions, all information each transaction required by the ASMX Consolidated Market Activity Report.
An Official of the ASMX shall approve any corrections to reports published in any single day’s ASMX Consolidated Market Activity Report. Any such correction shall be made within one day after detection of any failed transaction or reporting error.
Page 46 | ||
CHAPTER IX
LISTINGS & LISTED ISSUERS
The ASMX is entrusted with the authority to preserve and strengthen the quality and public confidence in Alternative Securities and Alternative Investments. The ASMX stands for Integrity and Ethical practices in order to enhance investor confidence in Alternative Securities and Alternative Investments, thereby contributing to the financial health of the overall economy, and supporting the capital formation process. From the he ASMX’s Early and Development Stage Companies, to Operating Companies of International Stature, each are recognized as sharing these important traits that we hold true.
The ASMX, therefore has broad discretionary authority over the initial and continued listing and trade of securities on the ASMX in order to maintain the quality, the public confidence in the ASMX, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest.
The ASMX may use such discretion to deny any application of any Issuer applying for listing for trade, apply additional or more stringent criteria for the initial or continued listing of any securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on the ASMX inadvisable or unwarranted in the opinion of the ASMX, even though the securities meet all enumerated criteria for initial or continued listing on the ASMX.
Rule 9.1.0 – Use of Discretionary Authority
To further the understanding of this Rule, the ASMX has adopted this Rule (Rule 9.1.0) as a non-exclusive description of the circumstances in which the Rule is generally invoked.
The ASMX may use its Authority to deny initial or continued listings to a Company when an individual with a history of regulatory misconduct is associated with the Company. Such individuals are typically an officer, director, substantial shareholder, or consultant to the company. In making this determination, the ASMX will consider a variety of factors, including (but not limited to):
·
The nature and severity of the conduct, taken in conjunction with the length of time since the conduct occurred;
·
Whether the conduct involved fraud or dishonesty;
·
Whether the conduct was securities related;
·
Whether the investing public was involved;
·
How the individual has been employed since the violative conduct;
·
Whether there are continuing sanctions (either criminal or civil) against the individual
·
Whether the individual made restitution;
·
Whether the Company has taken effective remedial action; and
·
Page 47 | ||
The totality of the individual’s relationship to the Company, giving consideration to:
o
The individual’s current or proposed position;
o
The individual’s current or proposed scope of authority;
o
The extent to which the individual has responsibility for financial accounting or reporting; and
o
The individual’s equity interest.
Based on this review, the ASMX may determine that the regulatory history rises to the level of a public interest concern, but may also consider whether remedial measures proposed by the Company, if taken, would allay that concern. Examples of such remedial measures could include any or all of the following, as appropriate:
·
The individual’s resignation from officer or directors position, and/or other employment with the company;
·
Divestiture of stock holdings;
·
Termination of contractual arrangements between the company and the individual; or
·
The establishment of a voting trust surrounding the individual’s shares.
The ASMX is willing to discuss with companies, on a “case-by-case” basis, what remedial measures may be appropriate to address public interest concerns, and for how long such remedial measures would be required. Alternatively, the ASMX may conclude that a public interest concern is so serious that no remedial measure would be sufficient to alleviate it. In the event that the ASMX staff denies initial or continued listing based on such public interest considerations, the company may seek review of that determination through the filing of an appeal to the Board of Directors of the ASMX. On consideration of such appeal, the Board of Directors of the ASMX may accept, reject or modify the Staff’s recommendations by imposing conditions.
Requests for Appeals are required to be in writing, and submitted to the ASMX Board of Directors by:
By Email:
Legal@AlternativeSecuritiesMarket.com
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Appeals
4136 Del Rey Avenue
Marina Del Rey, California 90292
Appeals submitted to the Board of Directors will be reviewed by all members of the Board of Directors, and a decision will be issued within 30 days of receipt of the request for consideration.
The ASMX may also use its discretionary authority, for example, when a company files for protection under any provision of the Federal Bankruptcy Laws or comparable foreign laws, or when financial statements do not contain a required certification.
Although the ASMX has broad discretion under this Rule to impose additional or more stringent criteria, this Rule does not provide a basis for the ASMX to grant exemptions or exceptions from the enumerated criteria for initial or continued listing, which may be granted solely pursuant to rules explicitly providing such authority.
Page 48 | ||
9.2.0 – Obligation for Companies to Provide Information to the Alternative Securities Market Exchange
The ASMX may request information or documentation, public or non-public, deemed necessary to make a determination regarding a company’s initial or continued listing, including, but not limited to:
·
Any material provided or received from the Commission or other Regulatory Authority;
·
Financial Statements; or
·
Corporate Governance Documents
A company may be denied initial or continued listing if it fails to provide such information within a reasonable period of time, or if a communication to the ASMX contains a material misrepresentation or omits material information necessary to make the communication to the ASMX not misleading. The company shall provide full and prompt responses to requests by the ASMX for information related to unusual market activity or events that may have material impact on trading of its securities on the ASMX.
A company must provide the ASMX with prompt notification of certain Corporate actions.
1.
Executive Officer Leaves the Company
2.
All Dividends
3.
Stock Splits
4.
New Stock Issues
5.
Reverse Splits
6.
Names Changes
7.
Mergers
8.
Acquisitions
9.
Dissolutions
10.
Bankruptcies
11.
Liquidations
Rule 9.3.0 – Obligation to File Periodic Reports
A Company shall file all required periodic reports with the ASMX as required:
Three Mandatory Investor Reporting Requirement Categories of the ASMX:
1)
Full Investor Reporting:
a.
Quarterly Un-audited Financial Statements on SEC Form 1-SA to be emailed to Legal@AlternativeSecuritiesMarket.com within 120 days of the close of each business quarter. Company un-audited financial statements shall be privately distributed to all company investors (not for public view or distribution). All un-audited financial statements will be signed as “true and accurate” by the Chief Executive Officer and/or the Chief Financial Officer.
b.
Annual Audited Financial Statement on SEC Form 1-K to be emailed to Legal@AlternativeSecuritiesMarket.com within 60 days of the close of each business fiscal year. Company audited financial statements shall be privately distributed to all company investors (not for public view or distribution).
c.
Corporate Actions: Certain corporate actions must be disclosed to all Investors no less than TEN calendar days prior to record date. All Corporate Actions will be published on the Company’s Page on the ASMX (www.ASMX.CO and /or www.AlternativeSecuritiesMarket.com):
i.
All Dividends
ii.
Page 49 | ||
Stock Splits
iii.
New Stock Issues
iv.
Reverse Splits
v.
Name Changes
vi.
Mergers
vii.
Acquisitions
viii.
Dissolutions
ix.
Bankruptcies
x.
Liquidations
2)
Limited Investor Reporting:
a.
Quarterly Un-audited Financial Statements on SEC Form 1-SA to be emailed to Legal@AlternativeSecuritiesMarket.com within 30 days of the close of each business quarter. Company un-audited financial statements shall be privately distributed to all company investors (not for public view or distribution). All un-audited financial statements will be signed as “true and accurate” by the Chief Executive Officer and/or the Chief Financial Officer.
b.
Corporate Actions: Certain corporate actions must be disclosed to all Investors no less than TEN calendar days prior to record date. All Corporate Actions will be published on the Company’s Page on the ASMX (www.ASMX.CO and/or www.AlternativeSecuritiesMarket.com):
i.
All Dividends
ii.
Stock Splits
iii.
New Stock Issues
iv.
Reverse Splits
v.
Name Changes
vi.
Mergers
vii.
Acquisitions
viii.
Dissolutions
ix.
Bankruptcies
x.
Liquidations
3)
Non-Investor Reporting: (limited to Residential Real Estate Clearinghouse, Commercial Mortgage Clearinghouse and Life Settlement Fund Market transactions where securities are issued as “asset backed / secured debt note transactions).
a.
Monthly Status of the Company Report to be mailed by the Company to all Shareholders each Calendar Month. The “State of the Company Letter” shall detail the current operational status of the Company (or investment), detail information that the CEO feel is necessary for investors to know as it pertains to the future developments of the Company or the investor holdings.
b.
Corporate Actions: Certain corporate actions must be disclosed to all Investors no less than TEN calendar days prior to record date. All Corporate Actions will be published on the Company’s Page on the ASMX (www.ASMX.CO and/or www.AlternativeSecuritiesMarket.com):
i.
All Dividends
ii.
Stock Splits
iii.
New Stock Issues
iv.
Reverse Splits
v.
Name Changes
vi.
Mergers
vii.
Page 50 | ||
Acquisitions
viii.
Dissolutions
ix.
Bankruptcies
x.
Liquidations
All companies will supply the ASMX with:
·
Two (2) copies of all reports required, if submitted by mail; or
·
A single electronic copy of each report required, if submitted electronically by email to LEGAL@ALTERNATIVESECURITIESMARKET.COM
All required reports must be filed with the ASMX on or before the date they are required to be published on the Company’s page on the ASMX.
Rule 9.4.0 – Listing Issuers of Companies whose Business Plan is to Complete One or More Acquisitions
Generally, the ASMX will not permit the initial or continued listing of a company that has no specific business plan or that has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies.
However, in the case of a company whose business plan is to complete an initial public offering and engage in a merger or acquisition with one or more unidentified companies within a specific period of time, the ASMX will permit the listing if the company meets all applicable initial listing requirements, as well as the conditions described below.
1.
At least 90% of the gross proceeds from the initial public offering be deposited in a trust account maintained by an independent trustee, an escrow account maintained by an “insured depository institution”, as that term is defined in Section 3(c)(2) of the Federal Deposit Insurance Act or in a separate bank account established by a registered broker or dealer (collectively, a “deposit account”).
2.
Within 36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the company specifies in its registration statement or offering memorandum, the company must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the deposit account (excluding any deferred underwriters fees and taxes payable on the income earned on the deposit account) at the time of the agreement to enter into the initial combination.
3.
Until the company has satisfied the condition in paragraph 2 above, each business combination must be approved by a majority of the company’s directors.
4.
Until the company has satisfied the condition in paragraph 2 above, each business combination must be approved by a majority of the shares of common stock voting at the meeting at which the combination is being considered.
5.
Until the company has satisfied the condition in paragraph 2 above, shareholders voting against a business combination must have the right to convert their shares of common stock into a pro rata share of the aggregate amount then in the deposit account (net of taxes and amounts distributed to management for working capital purposes) if the business combination is approved and consummated. A company may establish (set no lower than 10% of the shares sold in the initial offering) as to the maximum number of shares with respect to which shareholder, together with any affiliate of such shareholder or any person with whom such shareholder is acting as a “group” (as such term is used in Sections 13(d) and 14(d) of the Act), may exercise such conversion rights. For purposes of this paragraph (5), shareholders excludes officers and directors of the company,
Page 51 | ||
the founding shareholders of the company, and family members or affiliates of any of the foregoing persons.
Until the company completes a business combination where all conditions in paragraph 2 above are met, the company must notify the ASMX about each proposed business combination. Following each business combination, the combined company must meet the requirements for initial listing. If the company does not meet the requirements for initial listing following a business combination or does not comply with one of the requirements set forth above, the ASMX will issue a Delisting Determination and delist the company’s securities.
9.5.0 – Business Combination with Non-Alternative Securities Market Exchange Entities Resulting in a Change of Control
A company must apply for initial listing in connection with a transaction whereby the company combines with a non- ASMX listed company, resulting in a change of control of the company and potentially allowing the non- ASMX company to obtain an ASMX Listing. In determining whether a change of control has occurred, the ASMX shall consider all relevant factors including, but not limited to:
·
Changes in the Management;
·
Changes to the Board of Directors;
·
Changes in voting power;
·
Changes in ownership; and
·
The financial structure of the company
The ASMX shall also consider the nature of the business and the relative size of the ASMX listed company and the non- ASMX company. The company must submit an application for the post-transaction entity with sufficient time to allow the ASMX to complete its review before the transaction is completed. If the company’s application for initial listing has not been approved prior to consummation of the transaction, the ASMX will issue a Delisting Determination and Delist the company’s securities.
9.6.0 – Bankruptcy and Liquidation
The ASMX may use its discretionary authority to suspend or terminate the listing of a company that has filed for protection under any provision of the Federal Bankruptcy Laws or comparable foreign laws, or has announced that liquidation has been authorized by its board of directors and that it is committed to proceed, even though the company’s securities otherwise meet all enumerated criteria for continued listing on the ASMX. In the event that the ASMX determines to continue the listing of such a company during a bankruptcy reorganization, the company shall nevertheless be required to satisfy all requirements for initial listing, upon emerging from bankruptcy proceedings.
9.7.0 – Code of Conduct
Each company shall adopt a code of conduct applicable to all directors, officers and employees, which shall be publicly available on the company’s page on the ASMX (http://www.ASMX.CO and/or http://www.AlternativeSecuritiesMarket.com). A code of conduct satisfying this Rule must comply with the definition of a “Code of Ethics” set out in Section 406(c) of the Sarbanes-Oxley Act of 2002 (“the Sarbanes-Oxley Act”) and any regulations promulgated thereunder. In addition, the code must provide for an enforcement mechanism. Any waivers of the code for directors or executive officers must be approved by the company’s board of directors. Companies shall disclose such waivers within four business days by filing and distributing a Press Release through the ASMG DISCLOSURE & NEWS SERVICE.
Page 52 | ||
Ethical behavior is required and expected of every corporate officer, director and employee of a listed company, whether or not a formal code of conduct exists. The requirement of a publicly available code of conduct applicable to all directors, officers and employees of a company is intended to demonstrate to investors that the Board of Directors and Management of the ASMX has carefully considered the requirements of ethical dealing of a company, and to ensure that each company has put in place a system to ensure that they become aware of and take prompt action against any questionable behavior. For company personnel, a code of conduct with enforcement provisions provides assurance that reporting of questionable behavior is protected and encouraged, and fosters an atmosphere of self-awareness and prudent conduct.
Rule 9.7.0 requires companies to adopt a code of conduct complying with the definition of a “code of ethics” under Section 406(c) of the Sarbanes-Oxley Act of 2002 (“the Sarbanes-Oxley Act”) and any regulations promulgated thereunder by the Commission. Thus, the code must include such standards as are reasonably necessary to promote the ethical handling of conflicts of interest, full and fair disclosure, and compliance with laws, rules and regulations, as specified by the Sarbanes-Oxley Act. However, the code of conduct required by Rule 9.7.0 must apply to all directors, officers and employees. Companies can satisfy this obligation by adopting one or more codes of conduct, such that all directors, officers and employees are subject to a code that satisfies the definition of a “code of ethics”.
As the Sarbanes-Oxley Act recognizes, investors are harmed when real or perceived private interest of a director, officer or employee is in conflict with the interests of the company, as when the individual receives improper personal benefits as a result of his or her position with the company, or when the individual has other duties, responsibilities or obligations that run counter to his or her duty to the company. Also, the disclosures a company makes to the ASMX are the essential source of information about the company for regulators and investors – there can be no question about the duty to make them fairly, accurately and timely.
Finally, illegal action must be dealt with swiftly and the violators reported to the appropriate authorities. Each code of conduct must require that any waiver of the code for executive officers or directors may be made only by the board of directors, and must be disclosed to shareholders, along with the reasons for the waiver. Any waivers of the code for directors or executive officers must be approved by the company’s board of directors. Companies shall disclose such waivers within four business days by filing and distributing a Press Release through the ASMG DISCLOSURE & NEWS SERVICE. This disclosure requirement provides investors the comfort that waivers are not granted except where they are necessary and warranted, and that they are limited and qualified so as to protect the company and its shareholders to the greatest extent possible.
Each code of conduct must also contain an enforcement mechanism that ensures prompt and consistent enforcement of the code, protection for persons reporting questionable behavior, clear and objective standards for compliance, and a fair process by which to determine violations.
9.10.0 – Failure to Meet Listing Standards
Securities of a company that does not meet the listing standards set for forth in this Rule Book are subject to Delisting from, or denial of initial listing on the ASMX. The ASMX is responsible for identifying deficiencies that may lead to Delisting or Denial of a listing application; notifying the company of the deficiency or denial; and issuing Delisting Determinations.
When the ASMX determines that a Company does not meet a Listing Standard as set forth in this Rule Book, it will immediately notify the company of the deficiency. As explained below in more detail, deficiency notifications are three types:
·
Alternative Securities Market Exchange Delisting Determination – which are notifications of deficiencies, and unless appealed, are subject the company’s immediate suspension and delisting;
o
Page 53 | ||
Inform the company of the factual bases for the ASMX’s determination of delisting, and the quantitative standard the company has failed to satisfy;
o
Provides the company with instruction regarding its obligation to disclose the deficiency under Alternative Securities Market Exchange Rules; and
o
Inform the company:
§
In the case of a Delisting Determination, the Company’s securities will be suspended as of the date certain; the company has a right to appeal the Delisting Determination to the Board of Directors of the ASMX, and that a request for appeal must be received by the ASMX in writing within Seven Calendar Days. The Company’s securities will remain suspended from all trading pending the appeal process.
o
A company that receives a notification of Delisting is required to make a public announcement disclosing receipt of the notification and the Rule(s) upon which the deficiency is based.
·
Alternative Securities Market Exchange Notifications of Deficiencies (Type I)– allows a company to submit a plan of compliance for review by the Chief Executive Officer of the ASMX. A decision for Delisting has not been made;
o
Inform the company of the factual bases for the ASMX’s determination of Deficiency, and the quantitative standard the company has failed to satisfy;
o
Provides the company with instruction regarding its obligation to disclose the deficiency under Alternative Securities Market Exchange Rules; and
o
Inform the company:
§
In the case of a Notice of Deficiency (Type I), the company may submit a plan of compliance for review by the Chief Executive Officer of the ASMX.
§
The deadline by which a plan must be submitted
§
That if the required plan of compliance is not received by the required deadline, the company’s securities may be subject to immediate suspension of trading and consideration for Delisting.
o
A company that receives a notification of Deficiency is required to make a public announcement disclosing receipt of the notification and the Rule(s) upon which the deficiency is based. A company that receives a notification of deficiency related to the failure to file an Investor Reporting Document on the date in which the report was due is required to make the public announcement by issuing a press release disclosing receipt of the notification and the Rule(s) upon which the Deficiency is based, in addition to filing any required Investor Reporting items, OR providing a date that is within 30 days of the press release, when the report will be available to the public, and the reasons for such delay.
·
Alternative Securities Market Exchange Notifications of Deficiencies (Type II) – a notice that allows for an automatic cure or compliance period. ASMX Notifications of Deficiencies generally allow for submission or a compliance plan, or an automatic cure, or compliance period may result, after review by the ASMX of the compliance plan or, expiration of the cure, or compliance period.
o
Inform the company of the factual bases for the ASMX’s determination of Deficiency, and the quantitative standard the company has failed to satisfy;
o
Page 54 | ||
Provides the company with instruction regarding its obligation to disclose the deficiency under Alternative Securities Market Exchange Rules; and
o
Inform the company:
§
In the case of a Notice of Deficiency (Type II), of the compliance items required to be received or cured for the automatic cure, and details on the compliance period, and expiration date of the compliance period.
§
The deadline by which a compliance items are required.
§
That if the required information is not received by the required deadline, the company’s securities may be subject to immediate suspension of trading and consideration for Delisting.
o
A company that receives a notification of Deficiency is required to make a public announcement disclosing receipt of the notification and the Rule(s) upon which the deficiency is based. A company that receives a notification of deficiency related to the failure to file an Investor reporting document on the date in which the report was due is required to make the public announcement by issuing a press release disclosing receipt of the notification and the Rule(s) upon which the Deficiency is based, in addition to filing any required Investor Reporting items, OR providing a date that is within 30 days of the press release, when the report will be available to the public, and the reasons for such delay.
For items requiring a review, after compiling all responses from a company to which notice has been served regarding an ASMX Notification of Deficiency, the information will be presented to the Chief Executive Officer of the ASMX, who will review all information, and make any determination about Continued Listing, Delisting or Denial of a Listing Application.
Should the Chief Executive Officer of the ASMX find just cause for the company to be Delisted, the company will be served notice of the Delisting order, and the Delisting process will begin immediately.
Ø
Appeal: Delisting Decisions may be appealed to the Board of Directors of the ASMX for reconsideration. Requests for Appeals are required to be in writing, and submitted to the ASMX Board of Directors by:
By Email:
Legal@AlternativeSecuritiesMarket.com
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Appeals
4136 Del Rey Avenue
Marina Del Rey, California 90292
Appeals submitted to the Board of Directors of the ASMX will be reviewed by all members of the Board of Directors, and a decision will be issued within 30 days of receipt of the request for Appeal.
Rule 9.11.0 – Re-Listing of a Company
A company that has been the subject of a Delisting must comply with the requirements for initial listing to be considered for re-listing. A company that has been suspended, but that has not been subject to a Delisting, shall be required to meet all compliance issues resulting in any suspension from trading, once all compliance items have been satisfied, the company will be allowed to continue trading.
Page 55 | ||
Rule 9.12.0 – Voluntary Termination of Rights as an Issuer:
A Listed Issuer of the ASMX may voluntarily terminate its rights as a Listed Issuer only by a written “Voluntary Delisting Request” addressed to the ASMX’s Secretary.
By Email:
Legal@AlternativeSecuritiesMarket.com
By Mail:
Alternative Securities Market Exchange, Inc.
Attn: Delisting
4136 Del Rey Avenue
Marina Del Rey, California 90292
Such Voluntary Delisting Request shall immediately take effect following the receipt of such written Voluntary Delisting Request.
Any Voluntary Delisting Request as a Listed Issuer does not relive the Listed Issuer from:
·
Any and all indebtedness due the ASMX (Alternative Securities Market Exchange, Inc), Alternative Securities Market, LLC or Alternative Securities Markets Group Corporation;
·
Any ASMX investigation or disciplinary action brought against the Listed Issuer; and
·
Any examination of such Listed Issuer that may be process.
Page 56 | ||
CHAPTER X
FEES & CHARGES
Rule 10.1.0 – Authority to Charge Fees and Other Charges
The ASMX may prescribe such reasonable fees or other charges as it may, in its discretion, deem appropriate. Such fees and charges may include, but are not limited to:
o
Initial Application Fees;
o
Market Transaction Fees;
o
Monthly Listed Issuer Fees;
o
Filing Fees;
o
And other fees as the ASMX may determine.
ALL SUCH FEES AND CHARGES SHALL BE EQUITABLY ALLOCATED AMONG ALL MEMBERS, LISTED ISSUERS AND MARKET PROFESSIONALS.
Rule 10.2.0 – Regulatory Transaction Fee
The ASMX may be required to pay certain fees to the Commission. To help fund the ASMX’s anticipated operating expenses and any obligations to the Commission, the ASMX has incorporated a “Transaction Fee” to all investment transactions facilitated on the ASMX.
Each transaction engaged on the ASMX will be subject to a Transaction Fee of:
·
1/10th of 1% of the gross purchase of any securities.
This amount is required to be paid by the party that sold the securities in the transaction. This Fee is subject to change at any time without notice.
Rule 10.3.0 – Schedule of Fees
The ASMX will provide all Members, Listed Issuers and Market Professionals with notice of all relevant fees and charges of the ASMX. Such notice may be made available to Members, Listed Issuers and Market Professionals on the ASMX websites at http://www.AlternativeSecuritiesMarket.com and/or http://www.ASMX.CO
Page 57 | ||
CHAPTER XI
BUSINESS CONDUCT
Rule 11.1.0 – Adherence to Law
No Member, Listed Issuer or Market Professional shall engage in conduct in violation of the Securities Act, the Exchange Act, the Rules of the ASMX, or the rules of any Clearing Corporation insofar as they relate to the reporting or clearance of any securities transaction, or any written interpretation thereof.
Every Member, Listed Issuer or Market Professional shall supervise any “associated person” with that Member, Listed Issuer or Market Professional is associated, as to assure the associated person’s compliance therewith.
Rule 11.2.0 – Rumors
No Member, Listed Issuer, Market Professional or Associated Person associated with the ASMX shall circulate, in any manner, rumors of a character which might affect market conditions in any security; provided, however that this rule shall not prohibit discussion of unsubstantiated information, so long as its source and unverified nature are disclosed.
Rule 11.3.0 – Prevention of the Misuse of Material Non-Public Information
A.
Every Member, Listed Issuer and Market Professional shall establish, maintain and enforce written policies and procedures reasonably designed, taking into consideration the nature of the Member, Listed Issuer or Market Professional’s business, to prevent the misuse of material non-public information by a Member, Listed Issuer or Market Professional, or by an associated person that is associated with a Member, Listed Issuer or Market Professional, that is in violation of the Federal Securities Laws or the Rules of the Alternative Securities Market Exchange.
B.
Misuse of material non-public information includes, but is not limited to:
a.
Trading in any securities by a corporation, or in any related securities, while in possession of material non-public information concerning that corporation;
b.
Trading in an underlying security while in possession of material non-public information concerning imminent transactions in the underlying security or related securities; and
c.
Disclosing to another person any material non-public information involving a corporation whose shares are traded on the ASMX, or another Over-the-Counter Securities Market or Regulated Market, or disclosing an imminent transaction in an underlying security, or related securities for the purpose of facilitating the possible misuse of such material non-public information.
C.
Each Member, Listed Issuer and Market Professional shall establish, maintain and enforce the
Page 58 | ||
following policies and procedures as appropriate for the nature of the Member, Listed Issuer or Market Professional’s business:
a.
All associated persons must be advised in writing of the prohibition against the misuse of material non-public information.
b.
Signed attestations from the Member, Listed Issuer, Market Maker and all associated persons affirming each person’s awareness of, and agreement by, the aforementioned prohibitions must be maintained for at least three (3) years, the first two (2) years in an easily accessible place.
D.
ANY MEMBER, LISTED ISSUER, MARKET PROFESSIONAL OR ASSOCIATED PESON WHO BECOMES AWARE OF ANY POSSIBLE MISUSE OF MATERIAL NON-PUBLIC INFORMATION MUST PROMPTLY NOTIFY THE ALTERNATIVE SECURITIES MARKET EXCHANGE.
Rule 11.4.0 – Regulatory Cooperation
A.
The ASMX may enter into agreements that provide for the exchange of information and other forms of mutual assistance for market surveillance, investigative enforcement and other regulatory purposes, which domestic and foreign self-regulatory organization, as well as associations and contract markets and the regulators of such markets.
B.
No Member, Listed Issuer, Market Professional or Associated Person subject to the jurisdiction of the ASMX shall refuse to appear and testify before the any self-regulatory organization in connection with a regulator investigative, examination or disciplinary proceeding, or refuse to furnish documentary materials, or other information, or otherwise impede or delay such investigation, examination or disciplinary proceeding if the ASMX, or a self-regulatory organization requests such information or testimony in connection with an inquiry resulting from an agreement entered into by the ASMX pursuant to paragraph (a) of this Rule. The requirements of this paragraph B shall apply regardless whether the ASMX has itself initiated an investigation or disciplinary proceeding.
Page 59 | ||
ASMG & ASMX
Corporate:
4136 Del Rey Avenue, Marina Del Rey, CA 90292
Issuer Direct: (800) 366-0908 / Email: Legal@AlternativeSecuritiesMarket.com
http://www.ASMX.CO
http://www.AlternativeSecuritiesMarket.com
BROKER DEALER PLACEMENT AGENT SELLING AGREEMENT FOR:
Accelera Innovations Fund I, LLC.
This agreement (the Agreement) is made as of August 15th, 2015, by and between Accelera Innovations Fund I, LLC, 20511 Abbey Drive, Frankfort, Illinois 60423 (Company) and Alternative Securities Market, LLC, a California Limited Liability Company organized under the State of California, with its principle place of business at 4050 Glencoe Avenue, Marina Del Rey, California 90292 (Broker).
The Company hereby agrees with Broker as follows:
1.
Broker shall be a registered Broker-Dealer and a member of the Financial Industry Regulatory Authority (FINRA), a part of whose business consists of the sale of securities. Broker will also be registered as a Broker-Dealer under the Securities Laws of one or more states of the United States.
2.
The Company is seeking to complete a Public Offering of Secured Debt Notes on the terms and conditions of the Companys prospectus to be qualified by the United States Securities & Exchange Commission pursuant to Regulation A, and any amendments thereto (the IPO).
3.
Broker desires to participate and assist in the Offering and sale of the Securities on a Best Efforts basis by soliciting, through Brokers Authorized and Licensed personnel, subscriptions for the purchase of the Securities in accordance with the terms of the Qualified Regulation A Offering & Prospectus and any amendments thereto. The Company desires to authorize Broker to enter into such solicitation efforts and to obtain such subscriptions, and it is the purpose of this instrument to set forth the agreement of the parties relative to such authorization.
4.
Broker also desires to act as originator and manager of selling group of any other participating Licensed Broker-Dealers on an exclusive basis with respect to the IPO. Broker has industry contacts, associations and relationships with other FINRA-Member Broker-Dealers that may be interested in acting in the capacity of selling agent on a best efforts basis in the Companys IPO. Broker desires to act as a manager of a group of participating FINRA Member Broker Dealers that will act as selling agents with Broker as subagents under the terms and conditions of this Agreement.
5.
Broker understands and acknowledges that the offer and sale of Securities will be Registered with the Securities and Exchange Commission under Section 5 of the Securities Act, as amended (the Act), as well as registration or qualification afforded by the Blue Sky Laws of those jurisdictions in which the Securities are offered or sold.
6.
Broker shall solicit subscriptions to purchase the Securities in compliance with all applicable Federal and State Securities Laws, the terms of the Qualified Regulation A Offering, Prospectus and amendments thereto, and the provision of this Agreement. Neither Broker nor any Officer, Agent Employee or other representative of the Broker is authorized to utilize or to display to any person, in connection with the solicitation of subscriptions for the Securities any information or material other than the Prospectus Memoranda and such other information or material as may be authorized and actually furnished by the Company to the Broker in connection with the Offering.
ASMG & ASMX
Corporate:
4136 Del Rey Avenue, Marina Del Rey, CA 90292
Issuer Direct: (800) 366-0908 / Email: Legal@AlternativeSecuritiesMarket.com
http://www.ASMX.CO
http://www.AlternativeSecuritiesMarket.com
7.
The Company shall have the right, in its sole discretion, to accept or reject any subscriptions tendered by Broker in whole or in part. Subscriptions need not be accepted in the order in which they are received.
8.
All funds to be received by the Company from subscriptions tendered by Broker and accepted by the Company shall be delivered in accordance with the subscription instructions set forth in the Companys Subscription Agreement. Upon the acceptance of each subscription agreement approved by the Company and which has been submitted to the Company through solicitation efforts undertaken by the Broker, Broker will be entitled to receive a commission equal to FIVE PERCENT (5%) of the sales price of the Securities which Broker places. The Company shall have no liability or obligation to Broker for any amount other than the commission provided for herein. The Commission shall be payable to Broker only if, as, and when funds are received by the Company from subscriptions for the Securities placed by Broker in accordance with this Agreement.
04% (FOUR PERCENT) of the Companys Current Issued and Outstanding Common Stock Shares to be escrowed with the Companys Legal Counsel in the name of Alternative Securities Market, LLC. The Shares of Escrowed Common Stock to be released to Alternative Securities Market, LLC fully diluted at the following milestones:
§
25% of the Escrowed Common Stock Shares to be released to Alternative Securities Market, LLC fully diluted upon the successful capitalization of the Company to 25% of the Companys Regulation A Offering. (Alternative Securities Market, LLC would own 1.00% of the Companys issued and outstanding common stock)
§
25% of the Escrowed Common Stock Shares to be released to Alternative Securities Market, LLC fully diluted upon the successful capitalization of the Company to 50% of the Companys Regulation A Offering. (Alternative Securities Market, LLC would own 2.00% of the Companys issued and outstanding common stock)
§
25% of the Escrowed Common Stock Shares to be released to Alternative Securities Market, LLC fully diluted upon the successful capitalization of the Company to 75% of the Companys Regulation A Offering. (Alternative Securities Market, LLC would own 3.00% of the Companys issued and outstanding common stock)
§
25% of the Escrowed Common Stock Shares to be released to Alternative Securities Market, LLC fully diluted upon the successful capitalization of the Company to 100% of the Companys Regulation A Offering. (Alternative Securities Market, LLC would own 4.00% of the Companys issued and outstanding common stock)
9.
The Company represents and warrants to Broker and agrees as follows:
ASMG & ASMX
Corporate:
4136 Del Rey Avenue, Marina Del Rey, CA 90292
Issuer Direct: (800) 366-0908 / Email: Legal@AlternativeSecuritiesMarket.com
http://www.ASMX.CO
http://www.AlternativeSecuritiesMarket.com
a.
The Company is a Limited Liability Company duly organized and validly existing under the Laws of the State of Wyoming, with all requisite power and authority to enter into and perform this Agreement.
b.
The Company is not in violation of its Articles of Incorporation; the Company is not in default in the performance or observance of any material obligation agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note, lease, tax return or other agreement or instrument to which it is a party or by which it or any of its properties is bound; and the execution and delivery of this Agreement, the consummation of the transactions contemplated herein and compliance with the terms hereof have been duly authorized by all necessary action and do not and will not result in any violation of the Articles of Incorporation of the Company and do not and will not conflict with, or result in a breach of any of the tenets or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company under, any material indenture, mortgage loan agreement, note, lease, or other agreement or instrument to which the Company is a party or by which it or any of its properties is bound, or any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its properties.
c.
This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation, enforceable in accordance with its terms.
d.
That no offer and no sale of the Securities will not begin until the Regulation A Registration Statement has been duly qualified by the United States Securities and Exchange Commission and the Securities have been registered in all of the States where the Securities will be offered for sale.
10.
Broker represents and warrants to the Company and agrees as follows:
a.
Broker is a Limited Liability Company duly organized and validly existing under the Laws of the State of California with corporate power and authority to enter into and perform all of its obligations under this agreement.
b.
Broker is not in violation of its Certificate of Incorporation or By-laws; Broker is not in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note, lease, tax return or other agreement or instrument to which it is a party or by which it or any of its properties is bound; and the execution and delivery of this Agreement, the consummation of the transactions contemplated herein and compliance with the terms hereof have been duly authorized by all necessary action and do not and will not result in any violation of the Certificate of Incorporation or By-laws of the Broker, and do not and will not conflict with, or result in the creating or imposition of any lien, charge or encumbrance upon any property or assets of Broker under, any material indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which Broker is a party or by which it or any of its properties is bound, or any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental
ASMG & ASMX
Corporate:
4136 Del Rey Avenue, Marina Del Rey, CA 90292
Issuer Direct: (800) 366-0908 / Email: Legal@AlternativeSecuritiesMarket.com
http://www.ASMX.CO
http://www.AlternativeSecuritiesMarket.com
instrumentality or court, domestic or foreign, having jurisdiction, having jurisdiction over Broker or any of its properties.
c.
This Agreement has been duly executed and delivered by Broker and constitutes the legal, valid and binding obligations of Broker, enforceable against it in accordance with its terms.
d.
Broker is duly registered as a Broker-Dealer in such states as it is required to be so registered in all states wherein the Broker will act on behalf of the Company as a placement or sales agent for the Securities.
e.
Broker will: (i) conduct the Offering and Sale of the Securities in accordance with the provisions of Federal and Applicable State Securities Laws; and (ii) shall limit the Offering of the Securities who meet the suitability standards set forth under Regulation A and, prior to any offer of the Securities to any such persons, have reasonable grounds to believe, and in fact believe, that such person meets such standards and maintain memoranda and other appropriate records substantiating the foregoing.
f.
Broker will not use or employ any information or materials in connection with the Offering and Sale of the Securities other than the Qualified Registration Statement.
g.
Broker will obtain and forward to the Company all documentation required to accompany subscriptions for Securities, fully and properly completed.
11.
Indemnification:
a.
The Company shall indemnify, and hold harmless, Broker and each person, if any, who controls Broker (within the meaning of either the Act or the Securities Exchange Act of 1937) as follows:
i.
Against any and all loss, claim, liability and expense, whatsoever arising out of any untrue statement of a material fact contained in the prospectus (or any amendment or supplement thereto), or the omission or alleged omission there from of a material fact required to be stated therein or necessary to make the statements therein not misleading;
ii.
Against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and
iii.
Against any and all expense whatsoever (including fees and disbursements of counsel chosen by Broker and approved by the Company, which approval shall not be unreasonably withheld) reasonably incurred in investigating, preparing or defending against any litigation or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission or based upon any blue sky filings, or lack
ASMG & ASMX
Corporate:
4136 Del Rey Avenue, Marina Del Rey, CA 90292
Issuer Direct: (800) 366-0908 / Email: Legal@AlternativeSecuritiesMarket.com
http://www.ASMX.CO
http://www.AlternativeSecuritiesMarket.com
thereof. It shall be the Companys responsibility to only accept subscriptions in the States where the Companys Securities have been properly qualified.
b.
Broker shall indemnify and hold harmless the Company, each director and officer of the Company, and each person who controls the Company (within the meaning of either the Act or the Securities Exchange Act of 1934), each consultant or financial advisor of the Company, and each agent, attorney, or representative of the Company, against any and all loss, claim, damage, liability and expense, but only with respect to false or misleading statements, alleged false or misleading statements, made by Broker, or any officer, director, employee or agent of Broker, not contained in the qualified registration statement / prospectus.
c.
Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify any indemnifying party shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. Any indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for the fees and expenses of more than one counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.
d.
If the indemnification is unenforceable, although applicable in accordance with its terms, then the parties agree that in order to provide for just and equitable contribution, they each shall proportionately contribute to the aggregate losses, claims, damages, liabilities or expenses contemplated by such indemnity agreement incurred by each of them, provided, however, that no person guilty of fraudulent misrepresentation shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
12.
All representations, warranties, covenants and agreements made herein or in certificates and instruments delivered pursuant hereto, shall remain in full force and effect regardless of any investigation made by or on behalf of Broker and its controlling persons, or the Company and its controlling persons, or any agreement of any of them, and shall survive sale and delivery of the Securities to be offered hereunder.
13.
All notices hereunder shall be in writing, and shall be personally delivered or sent by first class registered or certified mail, postage prepaid, to the parties at their respective addresses shown below, or such other addresses as may be so designated.
14.
Time shall be of the essence of this Agreement.
15.
This Agreement (other than those portions that survive) may be terminated by either party at any time by written notice to the other party.
16.
Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, or its interpretation or effectiveness, and which is not settled between the parties themselves, shall be settled by binding arbitration in Los Angeles County, California in accordance with the rules of the American Arbitration and judgment upon the award may be entered in any court having jurisdiction thereof. The prevailing party in ay litigation, arbitration or mediation relating to collection of fees, or any other matter under this Agreement, shall be entitled to recover all its
ASMG & ASMX
Corporate:
4136 Del Rey Avenue, Marina Del Rey, CA 90292
Issuer Direct: (800) 366-0908 / Email: Legal@AlternativeSecuritiesMarket.com
http://www.ASMX.CO
http://www.AlternativeSecuritiesMarket.com
costs, if any, including without limitation reasonable attorneys fees, from the other party for all matters, including, but not limited to, appeals. This Agreement is made in the State of California, and all questions related to the execution, construction, validity, interpretation and performance of this Agreement and to all other issues or claims arising hereunder, shall be governed and controlled by the Laws of the State of California.
IN WITNESS THEREOF, the parties hereto have executed this Agreement as of the date first above written.
Company:
Accelera Innovations Fund I, LLC
Signature: Mrs. Cynthia Boerum
Printed Name: Mrs. Cynthia Boerum
Title: Senior Managing Member
Broker-Dealer:
Alternative Securities Market, LLC
By: Mr. Weslie W. Johnson
Mr. Weslie W. Johnson
Managing Member
Alternative Securities Market, LLC
ASMG & ASMX
Corporate:
4136 Del Rey Avenue, Marina Del Rey, CA 90292
Issuer Direct: (800) 366-0908 / Email: Legal@AlternativeSecuritiesMarket.com
http://www.ASMX.CO
http://www.AlternativeSecuritiesMarket.com
N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7?^[=NW:M6O7KEV[=NW:M6O7KEV[=NW:M6O7KEV[=NW:
MM6O77'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQS
MS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQS
MS3777'/--==<<\TUUUR##CKHH(/.-==<<\TUUUQSS3777'/--==<<\TUUUQS
MS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQS
MS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUS_
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TYZ*"##CKHH(,..NB@@PXZZ*"##CKHH'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<_W/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS34 N7;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;M
MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;M
MVK5KUZY=NW;MVK5KUZY=N_]V[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV
M[=JU:]>N7;MV[=JU:]>N7;MV[=JU<^C0H4.'[MJU:]>N7;MV[=JU:]>N7;MV
M[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV
M[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV
M[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N77/--==<<\TUUUQS
MS3777'/--==<<\TUUUQSS3777(,..NA<<\TUUUQSS3777'/--==<<\TUUUQS
MS37_UUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS37GH(,..NB@
M@PXZZ*"##CKHH(,..NA<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU_]=<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUZ*"##CKH7'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--?_77'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUP#DVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=
MNW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVC5TYZY=NW;MVK5KUZY=
MNW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KU]"A
M0X<.'3ITZ-"A0X<.'3ITZ-!=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=
MNW;MVK7_:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N
M7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N
M7;MV[=JU:]>N7;MV[=JU:]>N7;MVS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQS_\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQS#3KHH(,..M=<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<__--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<@PXZZ%QSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUZ"##CKHH(,..NB@@PXZZ*"##CKG7'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUP#D&O7KEV[=NW:M6O7
MKEV[=NW:M6O_UZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5K
MUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5K
MUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5K
MUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5K
MUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5K
MUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=_[MV[=JU
M:]?0H4.'[MPUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS377H(,..M=<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUU_]<<\TUUUQSS37GH(,..NB@@PXZ
MZ*"##CKHH(/.-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--=?_7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777'/--==< P :8P\HUK%S#RC6L7,/*->:P<@TKU[!R#2O77,/*-:Q B@<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-=>@@PXZUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777',-.NB@@\XYUUQSS3777'/--=>T8DTKK%QSS3777/]S
MS3777'/--==<<\TUUUQSS37HH(,..NB@@PXZZ*"##CKH7'/--==<<\TUUUQS
MS3777'/--=>P<@TKUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQS
MS3777'/--==<<\TUUUQSS3777'/--0"Y=NW:M6O7KEV[=NW:M6O7KEV[=NW:
M.73HKEV[=NW:M6O7KEV[=NW:M6O7KEV[=NW:M6O7KEU#=^W:M6O7KEV[=NW:
MM6O7KEV[=NW:M6O7KEV[=NW:M6O7KEV[=NW:M6O7KEV[=NW:M6O7KEV[=NW:
MM6O7KEV[=NW:M6O7KEV[=NW:M6O7KEV[=NW:M6O_UZZA0X<.'3ITZ-"A0X?N
MW+5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;M
MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;M
MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVC5TUZY=NW;MVK5KUZY=<\TU
MUUQSS377H(/.-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS37HH(/.-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TU
MUUQSS3777'/--==<<\TU_]=<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUZ*"##CKHH(,.
M.NB@@PXZZ*"##CKHH(,..NB@@PXZZ*!SS3777'/--==<<\TUUUQSS3777'/-
M-==< 7/,,%"U8<\4LUW121S5/
MZ' --*V@8PTVUUQS#317S'+--9XD8DT=LUQC310Z("- (M=4<\4LUSRCPS77
M7'/--==<<\TUUUQSS37GH(,..NB@@PXZUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQS#4"N7<-V[=JU:X$ L+("@!4K #080, X-JY:P!67+MV
MS0J N7;MV[=JU:]>N7;MV[=JU:]>N7;MV
M[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;NATZ=.C0H4.'#MVU:]>N7;MV
M[=JU:]>N7;MV#1TZ=.C0H4.'#ATZ=.C0H4.'#ATZ=.C0H4.'#ATZ=.C0H4.'
M#ATZ=.C0H4.'#ATZ=.C0H4.'#ATZ=.C0H4.'#MVU:]?.H;MV[=JU:]>N74.'
M#ATZ=.C0H4.'#ATZ=.C0H;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]=<<\TU
MUUQSS37HH(,..NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"#SC777'/--==<<\TU
MUUP#S2S_T%QSS3777'/--==<<\TUUUQSS3777(,..NB@@PXZZ*"##CKHH(,.
M.NA<<\TUUUQSS3777'/--==<<\TUUUP3C2S1S'+--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/-
M-==<<\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==< P(DLKK+#"2BNL
ML,(**ZRPP@HKK+ "$%:L9D%CQ8H5*U:L6+%BA>C:M6BL6%UC=8V5K&BL6+%B
MQ8H5*U;76+%B!8T5*U:LKEUC=8T5*U:L6+&:Q8K5M6O7KEV[=NW:M6O7KEW_
MNW8-W;5KUZY=NW;MVK5KUZY=NW;M'+IKUZY=NW;MVK5KUZY=NW;MVK5KUZY=
MNW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY9:W7MVK5KUZY=
MNW;MVK5KUZY9FV6MU;5KUZY=NW;MVK5KUZY=NW;MVK5KZ-"A0X<.'3ITZ-"A
M0X<.'3ITZ*Y=NW;MVC5TZ-"ANW;MFK56UJY=NW;MVKEKUZY=NW;MVK5KUZZQ
M"H3NVK5KUZY=NW;MVK5KUZY=NW;MVK5KUZY=NW;MVC777'/--==<<\TUUUQS
MS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQS_\TUUUQSS3777'/--==<
M<\TUUUQSS3777'/--==<<\TUUUQSS3777',-*ZRP@@XZUUQSS3777'/--=<\
M<\4LUUQC30#6Z('(-==<<\TUUU@SAQ4R0-'%-:1X< B@
M<\TUUUQS_\TUUUQSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS377H(,..NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKH
MH(,..NA<<\XUUUQSS3777'/--==< A<<\TUUUQS
M#2NLL,**+*RPPHHLK+#""BNLL/_""BNLL,(**ZRPP@HKK+#""BNLL,(**ZRP
MP@HKK+#""BNLL,(**ZRPP@HKK+#"RC777'/--==<<\TUUUQSS3777',-.NA<
M<\TUK+#"RC777'/.-==<<\TUUUQSS3777'/--==< W:M6O7KEV[=NW:M6O7
MKEV[=NU:*VNMK+&ZQNH:JVNLHLFZQNH:JVNLKK&ZQLI:*UG19$63!6T6M%G0
M9D%K98W5-5:MK+6RULI:*VBRHLF*)JN5M5;66EEK9:V5M5;66EEK_V6ME;56
MUEI9:V6ME;56UEI9:V6ME;56UEI9:V6ME36M6-.*-:U8TXHUK5C3BC6M6-.*
M-:VP<@TKUT S"S2M6,/*-:Q H:JVNLKK&ZQNH:JVBRHLF*)BN:K&BRREUC9:T5M%G09D&;!6T6
MM%G09D&;!6T6M%G09D&3%4U6-%G19$5C=8W5-5;09D&;!6T6M%G09D&;!6T6
MM%G09D&;!6T6M%;66EEK9:V5M5;66EEK9:V5K&BRHLF*)BN:K&BRHLF*)BN:
M+ #8L&'#A@T "L6!%(.-V@@PXVV& #3C;D:(,--MA@@PXZYF"##3;88*,-
M-^9@@PTVV( C#C?9H',..NA@,PXVV)ASSC6! /\@ P '"--^!T@PXZV&"#
MC3CHH(,--MB4@\XWV'!C3C;HG/,-..)P N7;MV[=JU:]>N7;MV[=HU:+.@7;MV[=JU:]>N7;MV[=JU:]>N
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M LTLT,P"S2S0S +-+-#, LTLT+1B32NR1"-+-+)$(TLTLD3#RC6L1 , -A@
M@PTVV&BC#2M6!").-^B<@PTVV("3#3G:H(,..MB@@XXYV*"#C3C@8(,--MB8
MLPTVX*!3#C;88#..-]E@@PTVYJ#C#0 R .B@@TXXW92##3;8D(/--^A@
M@PTVY:"#_XXXW*"#CC;8;/.-.-B@@PXZZ*"#S3C88,,*.MB@$PXVV&"#S377
M8(/--MA@@PT @02"#2L&7'.-%=AX@\XYZ*"SC14 -MB0TPTXWI"##3;F
MH.,--MA@@PTVY703#CKH8',--JP ,TLUUQSS3777'/--==<<\TUUUQSC2S1
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M;-BP8 22B2@DRM*+*"BJT8 TI
M!B1B31(J'/" -:R0,,,LT,B1@RS1R!*-+-&HP (BK+ R1PZEK."%+-',\LP3
M!UA#2@"(6)/'"C*T8DTKUK3RS $EL)"(+,D8@(@UK5@3#32K/'$ -( ($@T
M@%3112ND5 ' +-"L8L ,K+1B332L1,,* #.TX@<47D2S2AX&F'(-"2MX44H5
M*QS0RC,&L("(+-'($HTLJY#0Q2H'S-**-:U8TXHUK5C3BBS1L#(+-+- ,PLT
MLT"##3;88(,--MADLP(K5H03B!777(,--MC_@(,-.=I@@PTVV'QS33G88(,-
M-MA@@PTVV&"##3;?H%,.-MA@@PTVV&"##3;FH , 0 6($-&S8KV+!U*X<-
M&S9LV+Z=PX8-&S9OV+1Q.X<-&S9LW\1A.X>-%;IKV,9APP8 !TX0!@PX;M
MFA5LV+!APX8-6Z! V #9OZ+"A P# "@ V+!A8[4B'#9LV+"90^<-
M&S9LV+"5XR8.'3ILU["Q L#JVK5KUZY=NW;MVK5KUZY=0]<*VJQKUZY=NW;M
MVK5KUZY=NW;MVK5KUZY=NX8.'3ITZ-"A0X<.';ISUZY=NW;MVK5KUZY=NW;M
MVK5KLZ#-BG;MVK5K_]>N7;MV[=JU:]>N7;LV"]HL:*VLM;+6REHK:+.BR8HF
M*YHL:+.@R8HV"YJL:+*BR8HF*QJT6=!F09L%[1JK:+.@S8(V"]HL:+.@S8HF
M*YJL:+)$(TLTLES#RC6L7,/*-:Q P<@TKU[!R#2O7L'(-*]>P\HP>*S00C2H'K*!#'BNL, ,K4 !" RLM
MR-**+*0(DH<7UJBP @M=Y+$"":R0XH4>7HPB""LLL%(* +*T,D @@PXZZ*"##CKHH(,..NB@@PXZUUQSS3777'/-
M-==<<\TUUUQSS377R!*-+-=<<\TUUUQSS3777'/--==<<\TUU[1B32O6M&)-
M*]:T(DLTLK!B32O6M&)-*P"YQNI:*VNLKK6RULI:*VNL9LF*)BN:K&BR6%V3
MQ>H:JVNLKK&*)BN:+&BS_UA%DQ5-5BMKK:"UDA5-5C19T61%DQ5-5C19UUA=
M8W6-5319T61!FP5M%K19T&9!FP5M%K19T&9!FP5MEIX S1!2M6E&)% JR08H47J\Q BA=1L")+-+)$
M(TLTLD0C2S2R1"-+-+)$(TLTLD0C2S2R1"-+-+)$(TLTLD0C2S2R1",+-+-
M,PLTLT S"S2S0#,+-+- ,PLTLT S"S2S0#,+-+- ,PLTLT S"S2S0"-+-+)$
M(PLTLT C2S2R1"-+-+)$(TLTLD0C2S2R1"-+-+)$(TLTLD0C2S2R1"-+-+)$
M(TLTLD0C"S2S0"-+-+)$(TLTLD0C2S2R1,/*+-#,PLHUK%S#RC6L0#,+-++_
M1"-+-+) ,PLTLD0C2S2R1"-+-+)$(TLTLD0C2S2R1"-+-+)$(TLTLK1B32NR
M1"-+-+)$(PLTLT S"S2S0,/*-:Q ,PLTLT S"P 8(,--MA@LP( K*P0B#@K
MH(,.-MAX PXV $ X-JU:X&^H3.'#1LV;."RD<.&K1PW;-_0E=.INX;]FP
M8<,& " :]=8 ;B&S0HV;-A67#NW ILX=.BPG<.LV;*Q68,-MVU0%8
M V5BL 8&-U[5H@* ,"&+5 WN
M7;MV[=HU05:L6.$2*!"70(%*7;MV[=JU:]>N7;MV#ATZ=.C074-W[=JU:]>N
M7;N&[MJU:]>N7;MV[=JU:]>N7;NATZ=.>N7;MVS3777'/--==<<\TUUUQS
MS3777'/--==<@PXZZ*"##CKHH(,..NB@@PXZUUR##CK77'/--==<
@@PXZZ)QSS3777'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377
M7,,**ZQ PPHKK+#"BBRLL,(**ZRPP@HKK+3""BNL7'/--==<<\TUUUQSS377
M7'/--==<<\TUUUQSS3777'/--==<<\TUUUQSS377L,(**^B@<\TUUUQSS377
M7',-*5Y<<__--=9@8P4.!WA"QC6CE.#%*#%8<,TUSUS1"A4L5($-%K.8,,LU
MUM#1PBS/E(!#%"N4X,4UUNB1R#777!/%+->0XL4UUY""A1P-0&,R1@\\ L
M4
W:M6O7KEV[=NW:
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M5319T61%8W6-532R1"-+-*Q