Replies to post #4783 on Be Active Holdings, Inc. (fka JALA)

[naturalborninvestor]

Well, looks to me that we have a large investor in the house here now. But I'm unsure about the motivation for them to enter such agreement.

This is what I could quickly find about equity reserve funding:

Reserve Equity Financing
Reserve equity financing constitutes a specialized form of equity financing in which an investment firm enters into a long-term relationship with a fledgling or otherwise small company looking to develop and generate capital through public markets. Unlike standard equity investment relationships, firms providing funding through reserve equity financing do not take control of the smaller firm, but simply provide financial assurance to use as leverage in trading equity. In 2011, for instance, investment firm AGS Capital Group invested $50 million in USA Synthetic Fuel Corporation through reserve equity financing. USA Synthetic Fuel does not get this money directly, but rather receives a $50 million foundation for which it may create and sell equity. Basically, the investor creates a reserve of capital from which to create equity.

Benefits of Reserve Equity Financing
Reserve equity financing provides various benefits to small firms, primarily by altering the traditional power dynamics found in investor-investee relationships. When a small business receives reserve equity financing it holds the power to create publicly traded shares in the manner it sees fit. It may also sell shares when it chooses to optimize the market value of shares and thus maximize return of capital on the initial investment. Furthermore, reserve equity financing relationships allow the small business receiving investment funds to spend money as chooses. Even if an investor places enough money in a small firm to purchase a controlling interest in that company, the firm doesn't actually hold a controlling interesting or any authority over expenditure and equity sales because it does not actually own equity. Rather, it provides in effect liability coverage for the sale of equity through invested capital.



Read more: http://www.ehow.com/info_10043823_reserve-equity-financing.html#ixzz2s1cLyLOm

[bioresearcher]

GREAT NEWS!!! NOW THEY CAN :

"We are currently in negotiation with varying sources of capital,"(DONE ) "which will allow us to execute on our derived plan for growth and re-launch Jala. Our team is very excited as we begin to enter the re-positioning and growth phase for Jala."