What is Private Placement?

Private Placement or Private Investment Capital, is money invested in your business from private investors and institutional investors in the form of stocks and bonds that does not need to be registered with the Securities Exchange Commission (SEC). ABC has discovered that Regulation A and D are one of the best forms of attracting private placement capital. Best of all, private placement is less expensive and easier than taking your company public. ABC use a combination of debt financing and equity capital for our clients.

Benefits of Private Placement with Alternative Business Capital

A great way to finance your company if you need from $1 million to $10 million We use a combination of debt financing and equity capital You maintain control of your business without getting into too much debt. Private investors & institutions are more secured owning stocks and bonds Our investors seek 10-30% return on investment (ROI) over a longer period of time The overall cost is much lower than most venture capital (VC) and initial public offering (IPO) You can raise money faster than most other forms of financing

Private Placement Facility is a flexible and cost-effective alternative to a traditional equity private placement or secondary offering. It provides the Company with the right, but not the obligation, to issue shares and raise capital or debt at a time of your choosing. Under the Facility, your Company will receive a firm commitment by the Private Placement Facility provider to provide a Convertible Note or purchase new Company shares up to an agreed maximum value. The facility would normally be available for up to 3 years and renewable thereafter. The program is entirely controlled by the Company. In contrast to a traditional public offering, placement or rights issue, the Private Placement Facility provides the Company with the flexibility of raising funding in amounts and at times of its choosing. Features of a Private Placement Facility Flexibility

Size of facility agreed to match the Company's individual financial needs ($5-100m) Private Placement Facility can be drawn down upon at any time Company can set a minimum acceptable price

Control

Company retains control over the amount and the timing of each draw down Company can ask Investor to buy shares regardless of market conditions Investor is a passive shareholder with no requirement for board representation

Speed

Standard placement documents used Company can take instant advantage of a favourable stock price Process is fast, settlement occurs within days

Certainty

Obligation to buy shares is binding upon the Investor Shares or Notes are issued as the Company determines, no uncertainty regarding outcome or dilution Investor remains committed for the full 3 year period of the Private Placement Facility Company is not committed to sell any shares, can do so only if it decides to

Cost-effective

Cost is fully competitive with traditional financing structures Moderate establishment fee No non-usage fees

Security

Unlike a credit or borrowing facility, there is usually no security requirement under this facility , however some of our funders require security for a convertible note facility depending upon the financial position of the Company

No Short Selling or Hedging by Investor

Investor covenants not to cause or engage in any direct or indirect short selling or hedging of the securities of the Company

Public/ASX announcement

The company's profile is likely to be enhanced by the required ASX announcement following the facility being put in place. Companies often advise shareholders and the media directly as well.

Uses of Private Placement Facility

Working capital/build cash reserves Funding acquisitions Funding capital investment and expansion Retire debt/reduce balance sheet gearing/reduce borrowing costs Enhances Company's credit and borrowing status Stand by funding

Private placement trading programs usually involves trading with medium term bank notes (MTNs) or Treasury Bills called T-Bills. PPP refers specifically to private placement trading programs with a high return on the investment associated with humanitarian project funding programs or Fed programs as compared to capital enhancement programs. These programs provide the traders with fresh issues of MTNs or T-Bills that produce high profit margins. This is known as the first tier. In the commercial world this would be called the B2B wholesale market. Now we all know that end users usually do not have access to the prices offered in the wholesale market, so they buy goods in the convenience store and not direct from the producer. Most of the time these programs require the investors to use a portion of their earnings for projects of humanitarian, social, or economic development in nature to make sure that part of these Profits are put back into the economy.

Even after deducting the portion of earnings to be used for projects, the investor is still left with a very substantial profit for their own investments. Performing PPP programs are difficult to find and are not always available. Only a very restricted number of high-level traders can get access to these type of programs. Many capable investors have been looking around for PPPs for years and are unable to find a performing provider. Often they have wasted large sums of money by sending MT760s to banks and so called traders that simply can not perform. Genuine programs are without risk to the investor what so ever, as the credit line raised against the capital is underwritten by the trading group. The (Investor) therefore is involved for the purpose of audit only, as it is by law that Financial institutions are not allowed to participate and therefore have to find a Private entity either a private person or company. At no time are the investors or better called Audit Fund Providers funds used for the trade. The procedures to enter are simple and fairly standard, however the Audit Fund Provider will have to adhere to strict compliance and non-disclosure. Many claim to be next to traders, this is 99.99% not the case. Traders are very busy people and have no time to sit down and have a chat. Therefore they have a structure in place where the first contact is with a compliance officer who will go through the submission papers and sort out the good from the nonsense.