Signature Devices Inc. (SDVI)

[BionicBoy]

READ - GRAFFITI HEDGE FUND DD


I asked Ken if he could provide some information about the deals or hedge fund and he sent me the following email..

M&A and JV deal Graffiti Entertainment

(Contact information removed by request)

We are investing ?360 Million into an American
Company called Graffiti Entertainment, Inc as
spin out of Signature Devices, inc. who are
rapidly expanding in the Film, Music, Video games
entertainment fields.

The company currently has $38+ Million in signed
acquisitions and another target of $300 million.

The company is in process of listing on the Frankfurt
(FSE) They are going to use our funding complete their
current acquisitions and provide them with a strong base
of available funds to continue to acquire synergistic
EBITDA positive companies in their space.

We are seeking both positive EBIDTA acquisition candidates
and possibly one partner currently listed with good liquidity
for a JV deal.

So we can provide the right party with both the money and the
asset to invest in below is the criteria for acquisitions and
JV partner.

Requirements for Acquisitions
(1) Positive EBIDTA companies width an EBIDTA of $2 million or better,
preferably $10+ million EBITDA

(2) Willing to move quickly and sign pre-IPO

(3) Strong management with proven industry track record

(4) Based within the entertainment industry (can be tech,
service or content related)


JV Partner
(1) Good chemistry with individuals and between organizations

(2) Ability to add value geographically, especially Europe, Asia and Australia

(3) Ability to bring strong Intellectual Properties to market, i.e. Film, Music,
Video Games, other entertainment including Social Networked games, online video, etc.

(4) Currently listed on the Frankfurt (FSE) a positive, but we can drive that process.


Please let us know if you have someone who would be a good candidate.


Please let us know what you want us to do.

All the best,

Alvin Donovan
www.thefmsgroup.com

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Below information taken from hedge fund website
http://www.thefmsgroup.com/special_private_placements.php

The fund has criteria for prospective companies seeking lines of credit....

SPP (Special Private Placements)

Quote:Special Private Placements (SPP)

We are institutional investors and fund managers.

We seek direct equity investments into listed and private companies with a capital funding requirement to expand business growth and EBITDA.

We require exceptional management, long-term sustainable growth opportunities with the potential to achieve significant milestones over a developmental period.

Investment amount is up to USD$1 billion, depending on your market cap for a non-controlling share position. Funds can be advanced promptly.
Investment Criteria

We seek listed public companies and the investment criteria list adopted by FMS is as follows:

1. You can achieve significant public announcement milestones during the developmental period.
2. You determine when you take the capital as and when you need it.
3. You use the proceeds to grow your business and your EBITDA.
4. Your funds are spent over a developmental period.

If you believe you fit our funding criteria a review and analysis of your business plan will be required as the next step.
Investment Procedures

Screening of potential investment targets is undertaken by FMS applying the following procedures:

1. Submit your funding request via the contact us form.
2. If you are a listed company, please include your stock symbol, which exchange you trade on, your market cap and average daily volume.
3. Include details with respect to how and why you fit our criteria.
4. Describe how much you need and when you need it.
5. Include your email address and best times to contact you.
6. If we proceed we will arrange a meeting or video conference with a member of our investment committee.
7. If we proceed further, we conduct further investigations and if we are satisfied that you fit our criteria we will send you proposed investment terms and funds can be advanced promptly.

All information is kept private and confidential and at this stage we will review your public company filings to determine whether or not to proceed to the next step and shall notify you of our decision via email.



Hedge Fund Manager
http://www.linkedin.com/pub/dir/?first=alvin&last=Donovan



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Below posted by Saredi

Quote:I love that one of the Board Members of the hedgefund is an ex-RCMP who investigated Money Laundering schemes (so...does that make my conspiracy theory of mob money less likely...or just more ironic? jking:).

"The advantage is that an SPP is pre-committed (for a period up to three years) with the issue being triggered and controlled by the company. In volatile and uncertain equity markets this pre-qualification and pre-agreed issue discount rate is superior in most circumstances. A typical fixed pricing placement requires no less due diligence, and does not have any certainty as to quantum, timing to complete and discount to the prevailing share price pre- issue. "

It appears that their major service is offering private placements where they are committed up to 3 years, thus avoiding a dilutive response even as O/S increase.

"Once the SPP is drawn down, doesn't the resulting new stock overhang the market?
No, a potential stock overhang post issue is considerably diminished than (say) a standard professional placement. Think about it...the stock is in the hands of one party who has committed to a three year SPP. They have backed the company with visible, tangible commitment. They are likely to do more draw-downs, and own more stock. They only make money if the share price appreciates "

And the leader of FMS Group seems to like writing articles about how great Hedge Fund financing is (no surprise, he runs one:):

http://www.a1articles.com/article_1534717_19.html

That article has an interesting section on reverse-merger exit strategies with shell companies (aka Companies listed on an exchange but essentially empty of assets/revenue...can you say 'SDVI post-IPO'?).

"A "reverse merger" is when an existing private company buys an existing public company with a stock symbol, which is usually a "shell company". A shell company is a public company that although still in existence and having a stock symbol, is no longer operating a business."


I think this info pretty much cements that the Hedge Fund will have control of Graffiti post-IPO (not that there was much doubt). In the short term, I don't see that as necessarily a bad thing either.

Thoughts?

Saredi