1. DDR & Associates Creating value through customized CORPORATE structure Walker Center 175 SOUTH MAIN ST. 15TH FLOOR SALT LAKE CITY, UT 84111 medancy@ddrassociates.com mdoron@ddrassociates.com drees@ddrassociates.com 801-303-5736 801-214-9215
18. Monitor and assess risk within your counterparty banks, suppliers, partners and clients
19. Determine your strategic growth plan and identify potential acquisitions, partnerships and funding options
20. Gain unique transparency into multiples, valuation and pricing for comparable M&A, equity, bond and loan transactions
21. Monitor global market developments and economic indicators that impact your business
22. Identify the most appropriate funding solution and reduce your cost of capitalMichael Dancy spent the last ten years in the trenches of the public finance and corporate structure world as the President of M.E. Dancy Consulting Services, Inc. Michael’s client list included numerous BioMedical firms, an IP Broadcast Television Media and Network Company, an Air Cargo Company and several companies developing green energy solutions including an environmental energy technology company focused on hybrid drive train development and geothermal power development and technology licensing of renewable geothermal electric power plants with one operating plant in southern Utah and eight active and early stage projects in four western United States: Utah, New Mexico, Nevada and Oregon, as well as a concession for 100,000 acres in Indonesia. Each of these public companies underwent significant corporate incubation including the placement of key management and public and private finance on their way to be acquired, furthering their corporate objectives or transition to national exchanges such as the New York Stock Exchange.Prior to his experience with the public finance world, Michael served as the CEO of MedQuest Pharmaceuticals of Utah. Michael spent 12 years in special projects, program management and engineering with McDonnell Douglas/Boeing, working on numerous government and commercial programs domestically and internationally. Michael received a Master of Science degree from the University of Southern California in Systems Management and a Bachelor of Science degree from the California Polytechnic University at San Luis Obispo in Aeronautical Engineering. Dancy’s further education path includes undergraduate work at Pasadena’s California Institute of Technology in Mechanical Engineering and Composite Design and Structural Analytics at UCLA (University of California at Los Angeles). ASSOCIATES & DDR Services
37. Exit StrategiesDTC Filings Current Report Filings (10Ks &10Qs) SEC & Legal S1 IPO Filings FINRA Filings Funding & Contract Reviews Assist company to complete target acquisitions Core Business Assist company with management team Develop funding strategies for growth & corporate capitalization Funding Strategy Provide project funding support to reach corporate goals Operational Structure Summary DDR & Associates offers unique solutions and services to its clients which range from small privately held companies to small to midcap publicly traded companies within the OTC, NASDAQ, AMEX and NYSE markets. Once a client is organized on a firm strategic, financial and operational foundation, we introduce our clients to select members of our investor and partner network that have an expressed interest in Public Offerings, Private Placements, Licensing Agreements, Debt or Exit Strategy. We approach your business as though it is our own. Our success can only be measured by your success. Our clients benefit from our long standing relationships with investors, bankers, corporations, VCs, and corporate law firms. Our commitment to ongoing client service, quality of deliverables, strategic advice, and candid feedback has ensured the best possible outcomes and is the foundation of our long-term strategic alliances.
38. Typical DDR Deliverables Typical DDR Deliverables – Companies should expect the following when through the DDR process The basic error made by most private companies is not beginning early enough to prepare for a private financing, or a public offering as part of a transition to a national exchange. The result is untold millions left on the table, or worse, transactions are never consummated. The seeds of a successful national exchange listing are sewn months/years in advance. Although Public offerings are each distinctly different processes, the people signing the checks ultimately all need to see the same basic things in or about a company, irrespective of the type of transaction. The following are steps that don't cost a lot, but can make a huge difference. CLEAN UP THE BALANCE SHEET The first financial statements given to potential investors or buyers set the stage. Subsequent revisions are at best viewed with skepticism. If owners want to pull out excess cash or retain personal ownership of real estate, equipment, copyrights or patents, get them off the balance sheet now. Loans to the company from shareholders should be replaced by bank debt, even if the shareholder has to pledge the company’s payoff as additional collateral for the new bank loan. Receivables due from officers or shareholders should also be cleared up. It is important to “come clean” with a company’s equity structure at the onset. This promotes trust between the balance sheet and potential investors. Investors want to make sure there are no “side deals” that exist which might negatively influence their equity position. HAVE AUDITABLE FINANCIALS Audited financials add value and may make the difference between doing the deal or not. (For almost all IPO's at least two full years of audited statements are mandatory.) If your financials aren’t audited, at a minimum have a credible CPA observe year-end inventory and file it away. The cost is nominal, and it usually makes a retroactive audit possible if other accounting records are in order. MANAGE THE INCOME STATEMENT Investors, buyers and underwriters all look for consistent earnings and growth. Peaks and valleys make them nervous. Earnings and growth to a degree can be managed within the bounds of generally accepted accounting principles (GAAP). Tax deferral is no longer the main objective. Spikes and dips in year-to-year profits reduce credibility and value, but in a smaller company can be smoothed out by increasing or decreasing reserves, giving or postponing bonuses or capitalizing or expensing, where the option exists. Also, within bounds of accounting rules it is perfectly legitimate for financial reports to be different from tax returns. Income statements can be "recast" after the fact to add back discretionary expenses such as excess owners' compensation and perks. If an IPO is the objective, however, high- ticket perks should be eliminated now because you can’t use recast financials in an IPO. Every $1 spent in a year can reduce the value of the company in an IPO by $10, $15 or more. If private investment or sale is a more likely goal, at least keep discretionary expenses readily identifiable so recast statements are easy to track and reconcile. FILL GAPS IN MANAGEMENT Most investors, underwriters and buyers consider management their top priority. Fill gaps in management, either internally or from the outside, sooner rather than later, and give people already on board the right titles. Companies with no Vice Presidents make management look thin, and managers with 60 days tenure aren’t particularly inspiring. Also, there should be at least the blueprint of a succession plan in place, and senior management should have meaningful and well thought-out answers as to their future intentions and expectations. Key executives should have professionally prepared employment, option and incentive agreements in place before discussions start. Seek outside help to determine what's customary given your circumstances and considered acceptable to investors, buyers or underwriters. POSITION THE COMPANY FOR THE RIGHT COMPARISONS Investors and buyers judge by comparison. Maintain a running comparison of your operating and financial statistics vs. those of your peers and competitors. Prospectuses, 10K’s and annual reports are excellent sources, as are trade associations and bankers' industry profile books. A fair comparison may require changing your accounting categorizations. DDR will study security analysts’ reports on companies in your industry and determine: a) which similarities you want to reinforce, b) which you should distance yourself from; and c) how to accomplish that. Also, try to determine a range of values for your business in the context of a sale, financing or IPO, based on what you can glean from public and trade sources.
39. TYPICAL DDR Client - Projected Timeline Typical Projected Timeline PUBLIC SEC FILING PROCEDURE PUBLIC COMPANY MILESTONES (36 MONTHS) COMPLETE 10K/Q AND OTHER SEC FILINGS COMPLETE S1 REGISTRATION RESPOND TO S1 COMMENTS FROM SEC SIT QUIETLY AND INCUBATE COMPANY CONDUCT INTERNAL FINANCE AUDITS MAKE APPLICATION TO DTC AND FINRA MAKE APPLICATION TO NATIONAL EXCHANGE INVESTMENT MILESTONES (36 MONTHS) INITIAL VALUATION OF 20M 500K SHARES ISSUED @ $1 5M SHARES ISSUED IN STAGES COMMENCERATE WITH BUSINESS @ AVG $3 INITIAL DILUTION (20M SHARES) SECONDARY DILUTION (20M SHARES @$5) (SECONDARY AT TIME OF NATIONAL EXCHANGE) 500K SHARES – 36 month incubation CAPITAL 5M SHARES – 18-24 MONTH ACQUISITION CAPITAL 40M SHARES ISSUED - $5/SH SECONDARY = 200M ADDITIONAL MARKET CAP 12.5M FOUNDER SHARES 2M DDR SHARES – TRANSACTION FEE 48 Month Projection @ $10/Share = 400M MARKET CAP AFTER 24 MONTHS Potential Investor Liquidity (3M Dollars @$3/SH) BUSINESS MILESTONES (36-48 MONTHS) COMPLETE product development Customer Acquisition/Expansion Grow Production Capabilities ESTABLISH INITIAL VALUATION (20M) WAYPOINT VALUATION (60M) WAYPOINT VALUATION (200M) Initial Customer Base Customer Base – Grows substantially Start Public Offering Road show(6 months) Should be EBITDA approximately 10M/yr Should be EBITDA approximately 20M/yr
![DDR & Associates DDR & ASSOCIATES, LLC DDR & Associates was formed to provide broad-based solutions to our clients by bridging the gaps that exist between traditional strategic consulting, legal, financial service and venture capital firms to facilitate the raising of capital. We accomplish this by helping our clients evaluate all the potential opportunities that exist to raise capital and acquire strategic resources. Our approach is never one of form fitting your needs to the solutions that we offer. Instead we find the right investment channel for your organization. We then help you prepare the information to support a highly targeted and proven communication approach that will optimize your opportunity so it will appeal to our extensive network of investment channels and potential partners. We focus on working with growing and emerging mid-capitalization companies. Our advisory and technical experience and expertise, and that of our alliance partners, enable us to provide services that leverage your global market potential. Our clients are located in Utah and throughout the United States, as well as overseas in China, India, the United Kingdom, the Netherlands, and other international locations. As a result, we have extensive experience helping our clients conduct business both domestically and internationally. DDR uses a blended approach to public and private finance. Our clients are typically development stage, however each business must be fundamentally based and able to move to a national exchange within approximately 36-48 months. Early sage investors expect significant returns, therefore the DDR team works to incubate each client to carefully blend a private equity approach, basing investment on current non-market related valuations, recognizing the upside alongside a company’s business execution. Below is a outline of services and criteria within DDR & Associates: Vincent & Rees Legal Services Provided Merger & Acquisitions Private Placements Securities Law Commercial Law Transactional Legal Services Private Equity Criteria ,[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)