Author Archive for Donald Hunter

NightFood Investment Opportunity

NightFood, a publicly traded company, will be launching a new listing on you-funding.com offering a great investment opportunity in the next few days.

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Over 70% of American adults snack regularly at night, and the most popular choices are cookies, chips, ice cream, and candy. We’re born with biological programming that drives powerful cravings at night…the same time of day when willpower is at its weakest. This combination of factors results in over $1B/week in nighttime snack consumption in the United States. That’s 44% of all snack consumption.

For years, health experts and media outlets have provided consumers with tips, tricks, and strategies for beating nighttime cravings. But, consumers don’t want tips or strategies. Consumers want products.

NightFood has set out to offer consumers better nighttime snack options, launching a line of products that satisfy night cravings in a better, healthier, more sleep-friendly way.

The Company has identified 3 major trends which are converging right now to create an exceptional opportunity. These are:

  • Consumers continue to seek snacks in the “better-for-you” category
  • Snacking frequency is growing across all dayparts, with exceptional growth in the evenings
  • NightFood products are just now entering national distribution channels

NightFood, Inc. is a wholly owned subsidiary of NightFood Holdings, Inc., which trades on the OTC Markets under the symbol NGTF. The Company is offering restricted shares of common stock at $.75/share to accredited investors only.

Note: there are a limited number of shares available in this financing round. These shares are priced at a significant discount to current market prices. There is no guarantee that enough shares will be available to meet demand. Any investor who is unable to participate in this financing round has the option to purchase shares on the open market at market prices. This offering is available to accredited investors only.

SEC Adopts Rules to Facilitate Smaller Companies’ Access to Capital

New Rules Provide Investors With More Investment Choices

FOR IMMEDIATE RELEASE
2015-49

Washington D.C., March 25, 2015  The Securities and Exchange Commission today adopted final rules to facilitate smaller companies’ access to capital.  The new rules provide investors with more investment choices.

The new rules update and expand Regulation A, an existing exemption from registration for smaller issuers of securities.  The rules are mandated by Title IV of the Jumpstart Our Business Startups (JOBS) Act.

The updated exemption will enable smaller companies to offer and sell up to $50 million of securities in a 12-month period, subject to eligibility, disclosure and reporting requirements.

“These new rules provide an effective, workable path to raising capital that also provides strong investor protections,” said SEC Chair Mary Jo White.  “It is important for the Commission to continue to look for ways that our rules can facilitate capital-raising by smaller companies.”

The final rules, often referred to as Regulation A+, provide for two tiers of offerings:  Tier 1, for offerings of securities of up to $20 million in a 12-month period, with not more than $6 million in offers by selling security-holders that are affiliates of the issuer; and Tier 2, for offerings of securities of up to $50 million in a 12-month period, with not more than $15 million in offers by selling security-holders that are affiliates of the issuer. Both Tiers are subject to certain basic requirements while Tier 2 offerings are also subject to additional disclosure and ongoing reporting requirements.

The final rules also provide for the preemption of state securities law registration and qualification requirements for securities offered or sold to “qualified purchasers” in Tier 2 offerings.  Tier 1 offerings will be subject to federal and state registration and qualification requirements, and issuers may take advantage of the coordinated review program developed by the North American Securities Administrators Association (NASAA).

The rules will be effective 60 days after publication in the Federal Register.

*     *     *

FACT SHEET

Regulation A+

SEC Open Meeting

March 25, 2015

Highlights of the Final Rules

The final rules, often referred to as Regulation A+, would implement Title IV of the JOBS Act and provide for two tiers of offerings:

  • Tier 1, which would consist of securities offerings of up to $20 million in a 12-month period, with not more than $6 million in offers by selling security-holders that are affiliates of the issuer.
  • Tier 2, which would consist of securities offerings of up to $50 million in a 12-month period, with not more than $15 million in offers by selling security-holders that are affiliates of the issuer.

In addition to the limits on secondary sales by affiliates, the rules also limit sales by all selling security-holders to no more than 30 percent of a particular offering in the issuer’s initial Regulation A offering and subsequent Regulation A offerings for the first 12 months following the initial offering.

For offerings of up to $20 million, the issuer could elect whether to proceed under Tier 1 or Tier 2.  Both tiers would be subject to basic requirements as to issuer eligibility, disclosure, and other matters, drawn from the current provisions of Regulation A.  Both tiers would also permit companies to submit draft offering statements for non‑public review by Commission staff before filing, permit the continued use of solicitation materials after filing the offering statement, require the electronic filing of offering materials and otherwise align Regulation A with current practice for registered offerings.

Additional Tier 2 Requirements

In addition to these basic requirements, companies conducting Tier 2 offerings would be subject to other requirements, including:

  • A requirement to provide audited financial statements.
  • A requirement to file annual, semiannual and current event reports.
  • A limitation on the amount of securities non-accredited investors can purchase in a Tier 2 offering of no more than 10 percent of the greater of the investor’s annual income or net worth.

The staff would also conduct a study and submit a report to the Commission on the impact of both the Tier 1 and Tier 2 offerings on capital formation and investor protection no later than five years following the adoption of the amendments to Regulation A.

The Commission is exploring ways to further collaborate with state regulators, including a program for a representative of NASAA or a state securities regulator to work with the staff in the SEC’s Division of Corporation Finance in implementing these rules.

Eligibility

The exemption would be limited to companies organized in and with their principal place of business in the United States or Canada.  The exemption would not be available to companies that:

  • Are already SEC reporting companies and certain investment companies.
  • Have no specific business plan or purpose or have indicated their business plan is to engage in a merger or acquisition with an unidentified company.
  • Are seeking to offer and sell asset-backed securities or fractional undivided interests in oil, gas or other mineral rights.
  • Have been subject to any order of the Commission under Exchange Act Section 12(j) entered within the past five years.
  • Have not filed ongoing reports required by the rules during the preceding two years.
  • Are disqualified under the “bad actor” disqualification rules.

The rules exempt securities in a Tier 2 offering from the mandatory registration requirements of Exchange Act Section 12(g) if the issuer meets all of the following conditions:

  • Engages services from a transfer agent registered with the Commission.
  • Remains subject to a Tier 2 reporting obligation.
  • Is current in its annual and semiannual reporting at fiscal year-end.
  • Has a public float of less than $75 million as of the last business day of its most recently completed semiannual period, or, in the absence of a public float, had annual revenues of less than $50 million as of its most recently completed fiscal year.

An issuer that exceeds the dollar and Section 12(g) registration thresholds would have a two-year transition period before it must register its class of securities, provided it timely files all of its ongoing reports required under Regulation A.

Preemption of Blue Sky Law

In light of the total package of investor protections included in amended Regulation A, the rules provide for the preemption of state securities law registration and qualification requirements for securities offered or sold to “qualified purchasers,” defined to be any person to whom securities are offered or sold under a Tier 2 offering.

Background

Under the Securities Act of 1933, when a company offers or sells securities to potential investors, it must either register the offer and sale or rely on an exemption from registration.  Regulation A is a longstanding exemption from registration that permits unregistered public offerings of up to $5 million of securities in any 12-month period, including no more than $1.5 million of securities offered by security-holders of the company.  In recent years, Regulation A offerings have been relatively rare in comparison to offerings conducted in reliance on other Securities Act exemptions or on a registered basis.

The JOBS Act amended the Securities Act to require the Commission to update and expand the Regulation A exemption.  In particular, the JOBS Act directed the Commission to:

  • Adopt rules that would allow offerings of up to $50 million of securities within a 12-month period.
  • Require companies conducting such offerings to file annual audited financial statements with the SEC.
  • Adopt additional requirements and conditions that the Commission determines necessary.

Effective Date for Regulation A+

The rule amendments become effective 60 days after publication in the Federal Register.

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View original press release here: http://www.sec.gov/news/pressrelease/2015-49.html
Related materials:  Final Rules

Who’s Funding America’s Small Business and Start-Ups, You Are

Don Hunter’s Plan to Provide Equity Capital to American Small Business

This article was originally posted on The Wall Street Chronicle and written by Laura Ratcliff.

Donald J. Hunter has made an extremely successful career by being an analytical virtuoso. Over the course of the last 25 years, he’s created an enviable business history first as a broker, and then, moving his way up through the ranks, as managing director, COO and CEO at some of Wall Street’s most successful brokerages. Despite all of that, he will be the first to tell you that it started out as nothing more than luck. In fact, a career as a financial analyst and broker was not even in the cards until Lady Luck stepped up and changed his story.

Hunter, 47, was a semi-undecided psychology major at Colgate University in New York when he literally won a top spot in a lottery. Not a Mega-Jackpot dollar lottery, but the coveted lottery for prestigious internships held at Colgate each year. Since Hunter received number two in the lottery, he had the second highest choice of internships available to all students who were looking for a great opportunity. He chose an internship at the brokerage firm Drexel Burnham Lambert during the School’s 1 month J-term (January-term) and discovered that he not only had an affinity for the financial world, but he loved it. He went back to Drexel for two more internships and following graduation went to work full time for the firm.

Over the course of the next two decades, Hunter worked at several other firms, making his way up to the CEO position at Westrock Group, Inc., where he helped broker and manage the historic sale of the firm to LBC Western Holdings. The sale was historic because the Lower Brule Sioux Tribe owns LBC Western Holdings; Westrock was the first brokerage firm to be acquired and owned by a Native American tribe. At the time of the sale, Westrock had over $1.4 billion of assets under management.

Since the sale of Westrock, Hunter has been consulting for a variety of financial interests, but his latest and possibly most exciting venture is something much less traditional than his previous professional work. Hunter is founder and CEO of You-Funding.com, an equity crowdfunding platform. While some readers may wonder what the big deal is (after all crowdfunding has been around for years), equity crowdfunding is entirely another ball of wax. Instead of nebulous reward programs or “feel-good” online karma, equity crowdfunding investors can hope to see big monetary returns.

Before the JOBS Act (Jumpstart Our Business Startups Act) was signed into law in 2012, small businesses that needed under a million dollars in funding to get going were often out of luck. Banks often don’t want to loan large amounts of money to untested startups because the rate of failure can be very high. Trying to get a half a million dollars (or more) in startup money from “friends and family” is often impossible unless you happen to live in Silicon Valley and have invented the next big thing. Enter equity crowdfunding. According to Kendall Almerico, a contributing writer at Entrepreneur.com, “anyone who wants to start or grow a business will be allowed to use an online equity crowdfunding portal to raise up to $1,000,000 by selling stock in their company” (companies who need funds for growth after an initial start up are allowed to raise up to $10 million in secondary offerings).

Sounds simple, right? Not exactly. The problem is that equity crowdfunding, even though it’s relatively new, is eventually going to involve billions and billions of investor dollars (some people, according to Almerico, predict it to become a trillion dollar industry) and the safeguards for this activity have been mandated to be established first. For that reason, it’s not as if any company that wants to raise money can simply set up a website and say, “Hey, send us some money so we can get started!” While the JOBS Act had broad bipartisan support when it was passed and signed into law, it requires a high level of consumer protection in the form of Securities and Exchange regulations and FINRA (Financial Industry Regulatory Authority) oversight.

One of the major problems is that the SEC rulebook for equity crowdfunding that was released in late 2013 is 585 pages long. Even the SEC acknowledges that its own rules “could cost a new business as much as $30,000 to raise $100,000,” according to Almerico. “That’s enough to stop any small business in its tracks.” Hunter saw that he had an opportunity to not only get in on the ground floor of the equity crowdfunding industry, but he could also offer up a solid and money saving service to small businesses that just don’t have the financial chops to raise money on their own for start up or for growth. Additionally, You-Funding offers three payment options for companies who need to raise funds: they can pay a flat fee upfront (if they have the cash), they can finance the fee, or they can pay the fee in stock if it’s a publicly traded company. Whichever payment plan they choose, they stand to save tens and tens (or even hundreds) of thousands of dollars, depending on the amount of money being raised. Hunter says that equity crowdfunding can cost businesses “anywhere from 50-90% less” than a traditional stock offering on an exchange.

Hunter says he and his team carefully screen and evaluate the businesses accepted into the You-Funding.com family of startup or growth companies. Both he and a securities attorney vet companies who are interested in getting funds through equity crowdfunding. “Ultimately,” says Hunter, “it comes down to three things: they have to know their business, they have to have credibility in their industry, and they have to have a solid idea that they can perform on.” Hunter and his team are constantly on the lookout for companies that are candidates for equity crowdfunding. While there is no hard timeline for signing up new companies for investment, You-Funding is working to add new investments on a monthly basis. Hunter notes that he finds businesses that are good candidates in a variety of ways. Sometimes, he will get a call from a broker he knows who cannot fund a particular company because it is too small for their investment portfolio. Other companies have made inquiries through the You-Funding website or online advertisements, and often he finds companies through old-fashioned networking.

Hunter says that the stringent rules for company acceptance they have in place, as well as the years of experience his team has, helps to weed out companies that will likely underperform. “Even though this business is over the Internet, you still need to know the people at the (start up) companies. You need to see their headquarters. Even though I may never know all of the investors, I will always know the companies themselves.”

Hunter says a good example of this type of company is I-TAP, Inc., one of You-Funding’s initial offerings. I-TAP is a company that develops and distributes electronic draft beer dispensing systems. Hunter says that I-TAP is a great candidate for equity crowdfunding for several reasons. One of the principals is a former Budweiser executive, so he has excellent experience and ability to network within the industry. Additionally, Hunter says that I-TAP has data to prove their system. According to Hunter, I-TAP can save 8% of a pour over a hand-poured beer. While 8% on a single beer may not seem like much, in a setting such as a stadium where thousands of beers are poured, the savings can be significant. Additionally, I-TAP has already been successful in gaining a significant customer base within the industry and is now in the beta-testing phase of development for stadium type venues. Even so, I-TAP was unable to acquire funding from a bank, and it’s too small for an investment firm. Hunter says this type of scenario is exactly what equity crowdfunding was designed for, “Equity crowdfunding fills the niche for small companies.”

The reality is, investments of any kind can be very risky. As Hunter says, “There are no guarantees. NONE.” However, Hunter is determined to do everything he can to protect people who want to invest at the crowdfunding level. He says one way to do that is to diversify the portfolio You-Funding.com will offer to potential investors. Instead of offering only start up funding for new companies, You-Funding.com will also offer up secondary offerings from small over-the-counter companies that need funding for growth or new operations. The beauty of secondary offerings, according to Hunter, is that they are typically available at a discount over the initial offering, and people who purchase them can sell them after six months, often at a hefty profit. Hunter says it’s also a lot easier to find good, quality companies that need funding for expansion, because they are already on the road to success and need extra funding to grow even more. It becomes a win-win situation for the companies who need funding as well as for investors. Additionally, says Hunter, once you start successfully funding companies that need help, other successful companies that need funding see that they can enter the arena, too. “It becomes a very nice cycle,” says Hunter.

People who want to invest in crowdfunding with You-Funding can do so at no cost other than the investment in the company itself. You-Funding does not charge investors any type of funding fees, and investments can be made immediately as long as they are accredited investors. Hunter says that You-Funding solicits new investors through online advertising.

Hunter has plans in the works to protect his investors, though he stresses that these types of investments are never guaranteed and are in fact, considered high risk. One of the things he has in mind is to create a mutual-type investment fund that will help You-Funding investors spread the risk. Hunter says that investors “should not fall in love with one company and put all of their eggs in one basket.” By giving investors the opportunity to invest in a pool that supports all of the You-Funding companies, Hunter believes that investors will have a much higher chance of a happy outcome. “If done correctly, it can be a very profitable class of investments.” The fund will be managed by a broker who will be doing all of the review, analysis and pre-listing due diligence.

For now, equity crowdfunding is not open to everyone who wants to invest. Under the SEC rules that are now in place, investors must be accredited in order to participate, which basically means investors must have deep pockets (an individual income of over $200,000, or a joint income of over $300,000, or a net worth of over $1 million). Accreditation involves proving a certain net worth as well as following detailed regulations put in place by the SEC for these types of investments. However, at some point in the (hopefully) not too distant future, middle-class Americans will also be able to participate in the equity crowdfunding phenomenon, once the SEC stops dragging its heels and finalizes the Title III rules of the JOBS Act, which will cover investing for non-accredited investors. Part of the reason it is taking so long to open the investment class to unaccredited investors is because of the number of entities that have to weigh in, simply because of the huge number of people who could be potentially affected. Not only must the SEC and FINRA participate in the rule making process, but also each state must put in place its own set of rules and protections.

While some people may think it is unfair to be blocking out such a huge group of investors (up to 58% of Americans would like to participate in equity crowdfunding), for now it may be necessary. There is real concern that without strict rules in place, some investment firms could be operating like the Wild West. Hunter says he’s seen it before. “Twenty years ago I’d laugh when people would be trying to sell funds or securities out of their kitchens that seemed like obvious frauds; how could they get away with it?” While these types of “Wild West” scenarios are rare, they have created more awareness for oversight, which is why the Title III rules are taking so long to finalize. In the long run, however, Hunter says that equity crowdfunding will ultimately be more beneficial to both investors and to companies that are looking for funding. Overall, says Hunter, “it’s going to open up a whole new level of financing for small companies. And the most will be for deals between one and ten million dollars that wouldn’t get done otherwise.”

One of the most important things that can happen with the finalization of the Title III rules is to let the 99% in on the game. Ordinary Americans are clamoring for a chance to enhance their bottom line. Hunter says once the rules are in place, it will “open up a whole class of investments to the public that was never available before.” It could be a game changer for millions of people who are doing all they can to not only stay in the game, but to finally get ahead.

Hunter says that government bureaucracy may ruin that chance. The Title III rules have been in limbo for over a year. Although the SEC has said that putting the final rules in place for Title III was a top priority for 2014, we are no closer than we were a year ago to getting them finalized. Says Hunter, “My only fear in this environment is that they over regulate the industry right off the bat and diminish the whole reason the act was created.”

Despite the bureaucratic tangle that is holding up the Title III rules, Hunter remains optimistic. He says that the opportunities for ordinary Americans and small companies who are trying to grow have never been better. “For companies and investors it opens up an avenue of investing that was previously only open to institutional investors. It was impossible for the regular investor to get in on the ground floor.” Hunter says that while the risk is significantly greater in this type of investment, the opportunity for reward can also be great, though never guaranteed.

See more at: http://www.thewallstreetchronicle.com/Articules/Who%E2%80%99s%20Funding%20America%E2%80%99s%20Small%20Business%20and%20Start-Ups,%20You%20Are.html

Avalanche International Pushes To Be More Than Just a Safer Smoking Alternative

There’s no doubt that smoking is hazardous to a person’s health. According to the American Lung Association, cigarette smoking related diseases claim an estimated 443,000 American lives each year costing $4,260 per adult smoker. These statistics make cigarette smoking the single largest source of preventable morbidity (disease and illness) and premature mortality (death) worldwide.

While big tobacco companies like Phillip Morris International Inc. and Reynolds American Inc. have profited handsomely from selling cigarettes, companies like Electronic Cigarettes Intl Group Ltd (OTC: ECIG) and Avalanche International Corp. (OTC: AVLP) are focused on so-called e-vapor technologies that provide a smokeless alternative. Studies have shown that these alternatives could be very effective in combatting the problem.

In this article, we’ll take a closer look at Avalanche International and its unique product line-up that could help smokers switch to a less harmful habit.

Reducing the Risk

Recently, the products only available in the U.S. from Avalanche International’s subsidiary Smith and Ramsay Brands, where selected to be exclusively used in a clinical study by the San Giovanni Bosco Hospital Smoking Center ASL TO2 of Turin. In the 4-month study, 34 volunteers with a history of smoking 20+ cigarettes per day used the company’s Avatar vape pen and e-Liquid in lieu of cigarettes. The study shows some remarkable results confirming that e-vapor may hold promise.

After the four months, half of the participants quit smoking and relied completely on the vape pen and e-liquids, while 92% reduced their cigarette use. The data from the study also suggested that the Avatar vape pen has lower toxicity than normal cigarettes, which was measured by looking at CO levels in the blood that serves as a proxy of sorts for harmful substances.

“This study shows in particular the importance of using the electronic cigarette as a cessation tool in health care,” said Walter Ricciardi, Special Commissioner of the National Institute of Health in Italy. “Its effectiveness, in fact, is linked to its correct use allowing, in heavy smokers, to absorb the right amount of nicotine to prevent the patient from excess toxicity or withdrawal symptoms.”

Recurring Revenue

Avalanche International’s story is just as compelling for investors as it is for public health experts. By providing both a revolutionary vape pen and the premium vape liquid that’s consumed by them, the company’s razor-razorblade model could generate attractive recurring revenue over time for shareholders, driven by a growing end market for vape pens that consistently need refilling.

According to Vaping News, the vape market has grown to over $1.5 billion per year, featuring various flavors, nicotine levels, and other attributes to produce a unique and customized experience. Management believes that there will be a natural rising demand for high quality products and varying flavors to attract a diverse customer base, which it plans to capitalize on with its Smith & Ramsay signature brand.

Management plans to launch the signature brand and aggressively expand with additional brand lines for different markets. The signature line of premium vape liquid will focus on the vape store and traditional smoke shop markets, while other branded product lines will focus on convenience stores, gas stations, and yet others for ethnic-specific markets. Products like its vape pen and disposables will be tied to these lines over time.

Innovative Products

Avalanche International’s Avatar vape pen represents a step forward in the world of electronic cigarettes. With an elegant shape that embraces an innovative spirit, the vape pen features a new chip that significantly reduces charging time compared to other electronic cigarettes. Meanwhile, the ceramic paint guarantees a long lasting color and makes it much easier to clean than conventional brands.

In November, the company signed an agreement with Smart Evolution Trading SRL to become the exclusive U.S. distributor of the Avatar and Puff branded vape pens, e-liquids, and other accessories. The same product lines are already carried in over 1,000 stores throughout Europe, Africa, and Asia with 2013 gross revenue of over $33 Million USD ($27 million Euro), according to the company’s press release.

Management hopes to ink similar agreements in the future to expand its product lines to include a variety of accessories to complement its core business of providing premium vape liquids.

Looking Ahead

Avalanche International appears well positioned within the rapidly growing vape marketplace, with a signature brand of premium vape liquids and a growing line-up of accessories. With plans to scale into the market over the coming quarters, investors interested in the tobacco and marijuana industries may want to keep a close eye on the stock given the many potential catalysts.

For more information, visit the company’s website at www.avalancheinternationalcorp.com.

SOURCE: CannabisFN

The Westrock Group CNBC Interview

SEC Urged to Scale Back ‘Crowdfunding’ Rules

Firms Warn Current Restrictions Will Serve as a Deterrent to Smaller Companies

WASHINGTON—Startups and entrepreneurs are criticizing proposed “crowdfunding” rules designed to ease their ability to reach large numbers of investors online, warning the current restrictions will deter smaller companies from using the financing technique.

The firms are pushing the Securities and Exchange Commission to scale back provisions in rules the agency floated in October intended to make it easier for startups to…

Read the full article on the Wall Street Journal.
http://online.wsj.com/news/articles/SB10001424052702304071004579409323759964120

How to Prepare for Crowdfunding

A successful campaign takes a lot of prep—and upkeep along the way

Want to launch a crowdfunding campaign? You’d better get started yesterday.

The popular perception of fundraising sites like Kickstarter is that entrepreneurs can cut out a lot of the legwork of landing money. But experts say that’s far from true.

A successful campaign takes plenty of advance planning—as well as constant involvement…

Read the full article on The Wall Street Journal.
http://online.wsj.com/news/articles/SB10001424052702303932504579252402009731252

What You Need to Know to Become an Angel Investor

It’s easier than ever to make the leap. But also to make a big mistake.

Ready to strap on some wings and become an angel investor?

Investing in young companies or startups used to be just for very wealthy individuals with strong networks. But these days, you don’t need to be well connected to participate in deals. Now you only need fairly deep pockets and access to the Internet to get in on the ground floor of what could be the next Google or Facebook.

Behind the shift is a recent loosening of some government rules. Entrepreneurs can now openly solicit investors…

Read the full article on the Wall Street Journal
http://online.wsj.com/news/articles/SB10001424052702304402104579149390398554348

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