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2011 Providing comprehensive services and investment capital for China enterprises. CONFIDENTIAL – NOT FOR DISTRIBUTION

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Presentation on theme: "2011 Providing comprehensive services and investment capital for China enterprises. CONFIDENTIAL – NOT FOR DISTRIBUTION"— Presentation transcript:

1 2011 Providing comprehensive services and investment capital for China enterprises. CONFIDENTIAL – NOT FOR DISTRIBUTION

2 2 Introduction Global Investment Genesis Global Capital has been established to invest in proprietary opportunities with profitable growth companies in China. Genesis is a business development and marketing firm that specializes in investing and providing a turn-key solution for Chinese small and mid-sized companies desiring to be publicly listed in Western markets. We arrange investment of $3 to $50 million USD for company development and listing on US exchanges. Genesis Global Capital, LLC are located in Miami, Dallas and Qingdao. Genesis represents a collection of specialists with expertise in all facets of public listings, equity and debt financing and after market support for emerging growth companies. Since 1999, Genesis management is responsible for more than $800 million USD investment in Chinese companies alone. Our management team has been retained by more than 500 public companies for investor relations programs, market awareness campaigns, merger and acquisition strategy and to develop fundraising initiatives. Genesis core business is to take private Chinese companies public on U.S. and other non- Chinese stock markets

3 3 Genesis Global Capital Genesis invests its own capital, resources and management team to help structure, and market our partner client in the United States and abroad. Our Companys core competency is sourcing public merger and acquisitions opportunities for our contract clients. Genesis teams with Chinese companies as both an investor and partner. We provide the marketing strategy, counsel, and plans to support our clients business, financial, and marketing goals. We work closely with top management to define strategy and business models to develop effective tactics to support business development in the United States. Genesis has a strong background in marketing, corporate finance, accounting, manufacturing, research and development, and industrial engineering in areas relevant to the specific product lines and geographic markets addressed by its operations. The single most important goal of the newly merged public company is to create value for its shareholders and investors. Additionally, the Genesis mission is to combine energies with our partner and raise significant capital for the operations and the advancement of the new public company to become a global brand.

4 4 Genesis Global Capital Simple Proven Strategy Our Objectives Publicly List Chinese Companies in the US, creating a new publicly traded OTCBB company, AMEX, or NASDAQ. Raise capital for the newly merged public company; Obtain an equity or alternative investment $3 MM USD to $50 MM USD to accelerate the growth and expansion of the Company globally. Establish additional strategic relationships with manufacturers and distributors in the subsidiarys industry sector. Represent the day-to-day US operations for your our partner client by filing public reports, conducting corporate communications with institutional and individual shareholders. Maintain all Public Relations duties and garner new business for the Chinese company. Increase companies valuation and market cap through broad based marketing Introductions to independent research firms. Assistance with development of effective investor relations campaign.

5 5 The Critical Criteria Companies must meet our minimum suitability criteria. Competitive profile and regulatory nature of clients industry and solid performance of equity securities issued by similar public companies in the same industry. Trailing 12-month revenue of $20 million or more and Current shareholders equity of $5 million or more. Annual growth in revenues and earnings of 20% or more during the past 2 years, growth and market potential. People and management with solid education, experience and track records of success managing companies. Credible CEO and CFO who understand job of being public. Liquidity, financial strength and operating results and Net Income of at least $3 million in the past 12 months. Audited balance sheets for the two most recent fiscal years and audited income and cash flow statements for the three most recent fiscal years.

6 6 US Public Markets Why go Public? Going public can unlock the value of a private company. The market value of a public company is often substantially higher than a private company with the same structure and the same industry. Typically, a public company can carry ten times the value of a private enterprise. Benefits Improved Shareholder Liquidity Higher Company Valuation Acquisition Growth using Company Stock Greater Access to Capital Markets Employee Stock Incentive Plans Off Shore Stock Holdings Greater Prestige with Your Clients and Suppliers Access to the Most Liquid Market in the World Disadvantages Business Disclosure Requirements Energy and Cost Associated with Investor Relations Regulatory Compliance Creates Exposure to Liability

7 7 Creating Stockholder Value Through P/E Multiple Expansion Our mission is to create substantial, incremental stockholder value for emerging growth companies by taking them public. This P/E multiple expansion occurs over time and is generally achieved once a company is listed on NASDAQ. Better Valuations Private Company Seeking Public Listing

8 8 The market for micro-cap IPOs (where under $25 million of new capital is raised) has been virtually shut since During the last few years, the combination of a reverse merger and private placement (PIPE) has filled the IPO void and Genesis has been at the forefront of this market trend. We typically raise $3-50 million in a PIPE contemporaneous with a going public transaction and act as either a lead or co- manager.PIPE Unlike other placement agents, we generally set terms with the issuer before going to market (as opposed to soliciting term sheets from potential lead investors). We conduct 2-3 week road shows, including several days in Europe and the US. Investors in Genesis PIPEs are typically hedge funds (90%) and high net worth individuals (10%). From the time we have a private placement memorandum in hand, it typically takes 4-6 weeks (including the time on the road) to complete the PIPE. Investing and Capital Raise Access to US Capital

9 9 Portfolio Global Reach For over a decade the Genesis team has been a dedicated asset to over 500 US public companies for investor relations programs, market awareness campaigns, merger and acquisition strategy or develop fund raising initiatives. Our folio continues to grow as we expand our global network. Agfeed Industries Pluristem Life Systems AmeriChip International Jiangbo Pharmaceuticals ACRA Biopharma Inc Dragon International Viragen Biotechnology Sunwin Pharmaceuitcals China Wind Systems Innova Technologies Empire China Cement Renhuang Pharmaceuticals Hollis-Eden Pharmaceuticals Altus Pharmaceuticals China Redstone Group Leapfrog Smart Products Sky Star Bio Pharmaceuticals China Direct Yasheng Group Lotus Pharmaceuticals Accentia Biopharmaceuticals China Biotics Shiner International China American Holdings Genesis Technology Group Agronix Inc. Biovest International China Organic Agriculture China TechFaith Wireless Card Activation Technologies Enviro Voraxial Technology Smartheat Telecom Communications

10 10 About Genesis Former Chinese Listing Projects

11 11 Return on Investment Institutional Investors /Pre IPO

12 12 Key Investment Sectors AgricultureAutos & Parts Bio-medics Building SupplyBusiness Products Basic Materials Chemicals Computers Construction DrugsElectronics Utilities/Electric Foods/BeveragesForest Products/Paper Gaming Utilities/Gas Healthcare Household Goods Internet/Leisure Machinery and Tools Media Entertainment Metals Non-Ferrous Oil/Oil Services Precious Metals Protection Restaurants Safety Equipment Real Estate Retailing Semiconductors Software Steel/Iron TechnologyTelecommunication Textiles/Apparel TourismTransports Waste Management Sector Proven

13 13 What it Means to be a Public Company? Commitment to shareholders to corporate governance. Outside Directors Full Disclosure Commitment to work to create liquidity and a broader ownership of the stock. Investor Relations Research Quarterly conference calls Transparency Speaking at conferences

14 14 Defined Roles of both Partners What is Required of Genesis? Finance the Listing Process Work with Chinese company to manage the process (lawyers and accountants). Help Chinese company position the companys story so that it appeals to international investors. Market the transaction to US investors; Arrange investment Help US investors do due diligence. Ensure that transaction closes timely.

15 15 Defined Roles of both Partners Organize company for public offering and listing. Ability to audit financial statements per US GAAP. Business plan with 5 year projections (developed with Genesis). Legal assistance Commit to corporate governance and transparency required by international investors. Finance the Listing Process Work with Chinese company to manage the process (lawyers and accountants). Help Chinese company position the companys story so that it appeals to international investors. Market the transaction to US investors; Arrange investment Help US investors do due diligence. Ensure that transaction closes timely. Role of GGC Role of Client

16 16 Completed Deal Case Study-Timeline: 4. U.S. Audit 5. Legal Review 6. Company Re-organization 7. Acquired U.S. shell 8. Stock Exchange Agreement 9. Super 8-K 10. Closed $5mm financing 1. Engaged by Chinese Company 2. Pre-Audit 3. Pre-legal *Research Client for 1 year *File for NASDAQ *US Listed Company

17 17 China Listing Merger Technique USA Company Public Shell Step 1 CHINA COMPANY Step 2 NEW CHINA COMPANY Step 3 CAYMAN COMPANY Step 4 BVI COMPANY China Company is now a US listing! BVI Acquires 100% Cayman BVI Mergers into US Public Company Cayman Island Establishes 100% New China Co. New Company Established China Co exchange profit contracts with New China Co. This company is a WOFE

18 18 Completed Deal Case Study: China Redstone Group 1.In 2008 Genesis met Redstone CEO Mr. Yiyou Ran who agreed to engage with Genesiss subsidiary GPC in the Private-to-Public Process. 2.Genesis engaged a local Chinese PCAOB qualified CPA to conduct a pre-audit. Organize the partner company so it is GAAP-compliant Organize companys records so they are ready for full audit Identify any other issues that might impede the PPP process 3. Genesis engaged both a U.S.-based and a China-based law firm to conduct pre-legal preparation and assessment prior to full legal review. 4.Upon satisfactory completion of pre-audit, Genesis selected and engaged a U.S. auditor with a strong presence in China. 5.Auditor, equipped with specialized knowledge of Chinese accounting practices, prepared fully audited financial statements consistent with U.S. accounting principles. Chinese firm addressed all the legal issues related to transferring ownership of assets to an overseas entity with the CSRC (Chinas equivalent of the SEC) While audit was ongoing, full legal review commenced U.S. law firm addressed these same legal issues with the SEC Genesiss private-to- public process unlocked tremendous value for China Redstone!

19 19 Completed Deal Case Study: China Redstone Group 6. On advice of attorneys, Redstones shareholder structure was reorganized to to comply with SEC requirements. 7. Genesis, working with the U.S. law firm, acquired a suitable U.S. OTCBB shell for the purpose of taking Redstone public. Acquisition of shell was completed after rigorous due diligence 8. Genesis explored potential funding sources to provide capital for Redstones ongoing operations, to be invested in the public entity. 9. Stock exchange agreement was signed, swapping shares between the private corporation and the public shell, thus effecting completion of a reverse- merger. 10. Within 4 days of execution of the stock exchange agreement, the newly public Redstone filed a Super 8-K with the SEC, thus completing the public-to private process and allowing it to trade publicly. 11. Genesis continued its support of Redstones financial operations by lining up market makers to begin trading the new Redstone stock. 12. Closing of $5 million financing; Redstone is in process of second round of $20 MM USD, acquisition and has filed for NASDAQ application.

20 20 About Genesis Due Diligence and Underwriting Process Initial Investigation Investment Assessment Underwriting & Due Diligence Investment Review and Approval Documents Negotiated / Finalized Pre-Close Process Close / Fund Post Investment Management Exit / Harvesting Management Analysis Analysis of Opportunity Analysis of Situation Commercial Value Assessment Review historical financials Validate Projections Assess Financing Structure Assessment of Project Timing & Recoupment Review Market Comparables Financial Audit Reference Checks Background Checks Legal Diligence Checklist Finalize Due Diligence Finalize Operating and Marketing Plan with Management with Milestones Agreement on Reporting Proactive Outline of Genesis role in the ongoing execution and monitoring of investment Active involvement in marketing process and key decisions Vigilant monitoring of covenants and control features Investment Recoupment Sale of Assets Pass Term Sheet Offered / Negotiated Pass Potential Investment Identified Initial Due Diligence Pass Market Trends / Competition Investment Returns Investment Risks Downside Protection & Exit Possibilities Fits Criteria & Strategy Initial Information Gathering -- Review of legal contracts and agreements, chain of title, etc.

21 21 Develop capital markets strategy with private company. Coordinate Legal, Auditing and Accounting Process in US and China Coordinate and oversee Public Listing in the US Identify and evaluate various financing alternatives Provide loan financing, as required and review private company Assist with coordination of road show and private placement memorandum or prospectus Prepare financials, quarterly and annual reports. Situation analysis and monitoring Investor and analyst outreach Press release and investor presentation preparation Investor surveys Communications related to placement of securities Corporate governance advice WHAT DO WE DO FOR OUR PARTNERS? Services with real value Executive Overview We develop and manage business growth programs for Chinese corporations that are based on our strategic insights, reflecting our experience in business, finance, economics, politics, government, media, and public relations. Genesis provides strategy and execution services to Chinese clients and partners, who believe that penetrating US markets is critical to achieving their core operating and financial objectives.

22 22 About Genesis Genesiss Investment Team - United States United States -- Deal Structuring and Execution Kenneth Clinton, CEO. Chief Executive Officer has been totally reliant on China as a source of income and inspiration for 13 years. Clinton oversees client development, structuring and deal execution. Clinton originates new investments and manages all listing and investment activities. He has assisted over 50 Chinese companies penetrate US markets, as well as help several state- owned companies undergo management buyout programs. He has served as an advisor to over 30 global companies, including Disney, China Infrastructure Investment Corporation (CIIC), Shanghai Technology Stock Exchange (STSE), SVA Group, Focus Media, Electronic Data Systems (EDS), Dynegy Energy and Motorola. He served as the first non-Chinese member of the World Trade Center (Jiangsu Province), was elected to the board of directors of one of China's largest public companies and served as president of a Chinese manufacturing joint venture with over 3,000 employees. He received a Bachelors degree in Public Relations from Texas Tech University and also studied economics at the Kings College London. He has been the featured speaker on the topic of the China before numerous groups in over 20 countries. Tom Tong, Counsel. Before co-founding this firm, Mr. Tong spent six years with Locke Liddell & Sapp, where he developed a successful China practice for the firm utilizing his bilingual and bi- cultural skills. Tom regularly represents U.S. and Chinese companies in both inbound and outbound transactions and dispute resolution matters. Tom is licensed in the State of Texas. He is currently a Council Member of the International Law Section of the Houston Bar Association, and serves on the board of the Houston Asian American Bar Association and the Chinese Association of Professionals in Science and Technology. Genesiss investment team has a strong combination of: China-based operating, consulting and fund-raising experience. investment management and private equity expertise, and a strong track record of backing superior management teams.

23 About Genesis Genesiss Investment Team - United States United States -- Ray Hsu, Chief Technical Officer. Mr. Hsu has over 15 years of professional experience leading high-growth companies to create successful software products and solutions. He earned an MS in Computer Science from the Georgia Institute of Technology and graduated Summa Cum Laude with a BS in Computer Science Engineering from the University of Texas at Arlington. Mr. Hsu is currently the Vice President of Solution Delivery and founding member Corporation, a leading provider of Enterprise Field Mobility Systems for Fortune 500 Energy Services Companies and U.S. Federal Government agencies. Prior Mr. Hsu was a key member of the LabVIEW development team at National Instruments where he became the sole inventor of two U.S. patents in the areas of graphical data representation and differencing. Kenneth Clinton, Director. Dr. Ian Ashley, Director. Dr. Ashley graduated Summa Cum Laude with degrees in Chemistry and Biochemistry from Oberlin College before graduating from Baylor College of Medicine in Houston, Texas in Previously he worked for Merck & Co. in Research and Development with focus on hypertension and calcium channel blockers. He is ABEM Board Certified in Emergency Medicine after finishing a residency in Emergency Medicine at Loma Linda University Medical Center in Southern California. He currently serves as Attending Physician at Providence Hospital in Waco, Texas. Dr. Ashley serves as a Director of Lotus Pharmaceuticals Inc. Dr. Ashley has pharmaceutical industry expertise with increasing responsibility for all aspects of product development including global clinical development plans, clinical and medical operations, regulatory affairs, and post approval clinical marketing support. 23

24 24 About Genesis Genesiss Investment Team - United States China-- Deal Structuring and Execution Dr. Jifu Wang, President. Dr. Wang is former Chairman for the Department of Management and Marketing from 2006 to 2008 and the Interim Dean in the business school at the University of Houston, Victoria in He served as an executive in top management teams for several group companies in China's Shenzhen Special Economic Zone and has rich management experiences in international business from 1991 to His research interest includes global strategy and organizational change, and he has published more than 30 referred articles, a book and several book chapters in global strategy with focus on core competence and capable organizations. He obtained MS-HRM and Ph.D. of Management in Strategy from Auburn University in 1997 and He also obtained MBA from Emporia State University in He speaks fluent Chinese and English at Professional translator level. Michael Wang, CFO. Wang is CFO and CPA Licensed (Texas). Formerly the Chief Financial Officer of SNIF LABS INC., in Boston, MA and Shenzen. SNIF Labs was an active radio frequency identification (RFID) technology products. In addition, he served as special consultant to the CEO at JTec, Inc, a software start-up based in Beijing. He was formerly an auditor with Ernst and Young, in Houston. He began her career as a financial analyst with Arthur Anderson in Houston. He is a 2007 graduate of the Tuck School of Business at Dartmouth with an M.B.A. and a 2001 graduate of University of Texas with a Masters in Accounting. He is a CFA Level II candidate and fluent in Mandarin Chinese. Su Xiaojun, Chinese Counsel. Xiaojun is a graduate of Southwest University of Political Science and Law with LL.B. and LL.M. degrees respectively. He is a partner in GUANGXIAN with both civil engineering and legal translators experience. Since beginning his practice in 1999, Mr. Su has served Chinas 7th Construction Bureau of Hydro Engineering, China Railway Engineering Group, and other construction companies for highways, power plants, and other infrastructural projects. During practice he worked with QSI Chongqing Intl Schools, BVI HAOWAY Investment Ltd debt issuance, Modular Manufacturing Ltd, Aircraft Inventory Corp., as Chinas Cinda AMC and Great Wall AMC non-performing loans disposition. Mr. Su focuses his career on international investment, finance and infrastructure.

25 25 About Genesis Genesiss Strategic Partners- Global United States -- Deal Structuring and Execution PMB Helin Donovan Mr. Mike Berg San Francisco, California 50 Francisco Street, Suite 120 San Francisco, CA Tel Kabani & Company, Inc. Certified Public Accountants 6033 West Century Blvd., Suite 810 Los Angeles, CA Richardson & Patel, LLP Mr. Kevin Leung Wilshire Boulevard Los Angeles, California Telephone: (310) Facsimile: (310) Sherb & Co., LLP 1900 NW Corporate Blvd., Suite 210 East Boca Raton, FL Telephone: (561) Our strategic partners have all worked on Genesis projects. Our professionals are top tier in their industry. A brilliant cadre of attorneys, accountants and brokerage firms. Tew Cardenas LLP Mr. Jeff Tew Four Seasons Tower, 15th Floor1441 Brickell Avenue, Miami, FL Ph: (305) Fax: (305) Buchanan Ingersoll and Rooney PC 1835 Market Street, 14 th Floor Philadelphia, PA Tel: Berman Wolfe Rennert Vogel & Mandler, P.A. Mr. Charles Rennert NationsBank Tower, Suite Southeast Second Street Miami, Florida Tel: Evershine CPA Mr. Dale Chen 6F No 378 ChangChun Rd., Taipei, Taiwan, 104, R.O.C. Taiwan: Tel:

26 26 Overview Turn-Key Partner Genesis will foster a plan of organization that will satisfy both provincial and US listing standards. Genesis will develop and oversee the entire funding process through already established and proven networks. Genesis receives compensation only from equity in the new US listed company. Genesis covers all legal, auditing, and listing transactions expenditures. We provide the marketing strategy, counsel, and plans to support Chinese business, financial, or marketing goals. Acquisitions Reporting/Accounting Public Listing Finance and Banking We only enjoy equity success when the Chinese company becomes a new publicly listed company in the US. Investor Relations

27 27 Contact Information This document contains material non-public information. If the reader is not the intended recipient or agent responsible for delivering it to the intended recipient, you are hereby notified that any retention, dissemination or copying of the document is strictly prohibited. If you have received this in error, please immediately notify Richardson & Patel LLP, by telephone and return the original document to us at the address below. All inquiries regarding the proposed offering and all requests for additional information should be directed to either: Mr. Kenneth L. Clinton Highland Park Village Dallas, Texas Richardson & Patel LLP Wilshire Boulevard, Suite Los Angeles, CA (310) ext. 775 (Tel)

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