Crowdfunding Company Finds Way To Offer Equity

PALM SPRINGS, Calif. - Sept. 3, 2013 - PRLog -- This company's Perk offering will allow contributors to receive an embossed, signed and stamped corporate certificate guaranteeing the donor a right at a future date to receive a stock option contract issued by the Company.

The Company says it will issue the related Stock Options at such time as the Company either 1) is grandfathered or otherwise allowed to sell its stock via either this or a subsequent crowdfunding campaign, 2) becomes an entity able to sell its common shares of stock after completion of a reverse merger with a shell company, 3) undergoes a traditional IPO, or 4) is otherwise able to legally issue options for the purchase of its equity.

The total number of shares that will be made available via this route is estimated to be 219,590. If all shares are issued this amount will represent approximately 21.96% of the then expected to be issued and outstanding shares of the Company.

One embossed, signed and stamped corporate certificate guaranteeing the donor a right to receive an option contract will be issued for each $7,500 contribution made during this crowdfunding campaign. The certificates will be issued within 30 days of the close of the campaign. Holders of thecertificate(s) can exchange each certificate for one option contract, at such time as the above listed legal right for the Company to issue the options is obtained from each required jurisdiction and authority.

Each option contract will permit the option holder (a $7,500 donor) to acquire up to 2,174 shares of the Company's common stock, at a price of $0.01 per share. The options will expire 90 days from their date of issuance. Thus, a payment of $21.74 to the Company will earn for the option holder 2,174 shares of stock in the company.

While there is no correlation between the original $7,500 contribution to this crowdfunding campaign and the options, and none should be implied or assumed, if an option holder were to factor in all of their costs to acquire the 2,174 shares this would equate to a price per share of $3.46, an amount only slightly higher than the $3.00 price paid by the company's founders.

Clearly, if you believe in free enterprise and capitalism, and you invest in start-ups, then this is aPerk worth considering. SEC Chairman White has stated that she will release rules for the sale of common stock via crowdfunding campaigns this fall. The company has every reason to believe that in the process crowdfunding campaigns like theirs will be grandfathered. If they are not, the company will simply run another campaign at that time, adhering fully to all of the rules issued by the SEC.

What's important is that the company's Executive Management and  shareholders are intent on taking the company public in an appropriate and legal manner. If the above process of seeking to sell shares via crowdfunding is not approved by the SEC, then management will simply pursue one of the more traditional routes from a reverse merger to an IPO. If it does, the certificate of right of exchange offered will prevail there too.