Welcome to our new monthly newsletter. The third Thursday of each month, we send out a couple of current projects and updates related to the goings-on at NewGate Capital, our partner companies and our clients. We realize you are busy, so we promise to keep it brief.
We hope you are enjoying the beginning fall! For those of you fellow Floridians, you’re probably also relieved that the weather has finally dropped into the frigid 70s.With football season in full swing, we thought we would highlight one of our partner companies who has developed some new technology to be used at some upcoming live football games. We’ve also got a great business for sale for any of you who might be interested in turning over a new leaf.As always, please let us know if any of the companies below are of interest to you. We’d be happy to make an intro!
Congratulations to imediaReach!
They have entered into a three year agreement with Florida Citrus Sports for their new product LiveEventTV (http://liveeventtv.com/). The product, which allows attendees at live events to stream television feeds to their mobile devices while at the game, will be in commercial service at the Russell Athletic Bowl on December 29th and the Buffalo Wild Wings Bowl on January 1st.
They are also working on closing deals with the PGA TOUR, MLB, MLS and SEC for use at this year’s SEC Championship game in Atlanta, Georgia on December 5th.
They are having their first Live Event TV Investor Conference on Tuesday, October 27th at 5:30 PM EST at the Orlando Citrus Bowl — and you’re invited!! Hors D’oeuvres and beverages will be served. Guest Speakers include Steve Hogan, CEO of Florida Citrus Sports, and David Saphirstein, immediate past Director of Creative Technology for ESPN.
If you are interested in attending, please RSVP by replying to this email by October 22nd so we can let them know to plan for your attendance. Be sure to include the total number in your party. Following your RSVP, you will be provided with complete conference directions.
Glass, Window and Door Company for Sale
NewGate Capital Partners is representing the sale of a glass, window and door installation and replacement company headquartered in Central Florida.? The company has been in business for over 30 years and maintains a loyal client base.
They have received the reader’s choice award within their community for the last 12 years and have received both the highest industry rating from several of their suppliers as well as an A+ rating with the Better Business Bureau.
The company has 25 employees with senior management in place. Sales have been increasing and they are projecting ~$4.5 million by 2015 year end. There is a 12,000 sq. ft. building comprised of office area, show room and warehouse space sitting on approximately 3/4 acre of land — all included in the sale.
Expressions of interest can be directed to Monte Mitchell, Associate at NewGate Capital. Monte can be reached via email at email@example.com or on his cell at (407) 408-9635.
Did you like this newsletter? Was there anything of interest to you? Feel free to reach out to us or share with your network through email or any of the social networks below. We’d love to hear from you!
If this monthly newsletter isn’t for you or you think we’ve made a mistake by adding you to this mailing list, feel free to unsubscribe below. Of course, we hope you hang around =)
Welcome to our new monthly newsletter. Starting this September, the?third?Thursday?of each month we are going to send out a couple of current projects and updates related to the goings-on at NewGate Capital. We realize you are busy, so we promise to keep it brief. We hope you enjoy!
NewGate Capital Partners has partnered with Photon Communications
We’re excited to announce our recent partnership with Photon Communications!?Have you ever wondered what the experience is like for the hearing impaired and non-English speakers to watch a movie at your typical American cinema?
Photon Communications, LLC has solved the problem no one else could. Through their patented, multi-lens technology, they provide cinema patrons with an optional pair of 3D-like glasses to see subtitles in any language they choose. This closed-captioning technology remains invisible to the rest of the audience and does not compromise the high-definition integrity of the film.
This technology was developed by the founder in conjunction with Lockheed Martin. Photon Communications is planning to raise a small round of equity-based seed capital to help further the technology and fulfill pre-orders.
There are 40,194 cinema screens in the U.S. alone, all of which need a solution for the hearing impaired.
?Central Florida Engineering Firm for Sale
NewGate Capital Partners is representing the sale of a full service Inspection, Testing and Geotechnical Engineering firm specializing in Threshold Inspections.
In business for over 15 years, this firm has completed 5,400 projects covering 2 states including more than 20 Florida counties and has a long and loyal list of repeat customers.
They are on track to do $1.1M in revenue this year with a net of $230k, which are better than average margins. This company would be the ideal business for a young P.E. professional looking for a jump start in the industry or as an add-on to an engineering firm already in operation.
Any interest or inquiries about the business can be directed to Jeremy Edwards, Associate at NewGate. Jeremy can be reach via email at firstname.lastname@example.org or on his cell at 407-668-8949.
Did you like this newsletter? Was there anything of interest to you? Feel free to reach out to us or share with your network through email or any of the social networks below. We’d love to hear from you!
If this monthly newsletter isn’t for you or you think we’ve made a mistake by adding you to this mailing list, feel free to unsubscribe below. Of course, we hope you hang around =)?
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“Since the days of the first web browser businesses have felt the pressure to go online.?But today the Internet connects the cities we live in and the appliances we use.??It?s how we watch TV, listen to music, hail rides, trade stocks, chat with doctors, educate kids, store files, and shop for groceries.” ?
The Internet is no longer just one aspect of doing business;?it?s the core of how business works?the essential infrastructure of the global economy.
The internet has become an essential part of our lives not only in business but also how we communicate with our peers in a daily basis. Today, new generations are growing up in an electronic world, having access to computers and mobile devices from a young age. Businesses can’t ignore that and must have a presence online through websites, social media and e-commerce to keep competitive. What’s next? we will see what new gadgets bring on shaping the future of our daily lives and the global economy.
For more related information we recommend checking out:
AutoSaver.com Launches MarketVUE? Buyer Conversion Program for Used Car Dealers
AutoSaver.com, the company that pioneered range based vehicle pricing announces the release of MarketVUE? and TradeVUE? active market appraisal tools.
The best deals revealed
Our entire sales negotiation process starts and ends with AutoSaver.com – Clock Tower Auto Mall St. Augustine, FL (PRWEB) February 02, 2015
In order to maintain transparency, auto dealers are turning to automated systems to pull credible, third party data for their geographic area. AutoSaver.com has two new services that offer used car dealers an edge when evaluating vehicle prices. MarketVUE? uses real time market data to show all competing vehicles within a defined market along with inventory supply and demand and pricing analysis. Any dealer that is enrolled in the program will have the ability to see what other dealers have in stock and where their prices fall within the local averages. AutoSaver.com was the first to incorporate range pricing as an effective marketing tool for bringing buyers and sellers together.
?Our unique price reassurance program reduces sales negotiations and allows for a meeting of the minds between dealer and customer?, states AutoSaver.com CEO, Derek White. ?We understand that most buyers require validation before they make a purchase. Why not provide that validation on the dealer?s own website, rather than risk losing the customer to another site that offers it??, he adds.
Clock Tower Auto Mall, an independent dealership and AutoSaver.com customer has not only embraced these principles, but they?re rebuilding their website entirely based upon the AutoSaver.com platform. ?We are experiencing excellent results with AutoSaver.com?, states Clint Jones, Clock Tower?s owner and GM. Jones says ?We provide every website visitor a pricing report and market analysis, which reduces the time we spend explaining where our price came from. Our entire sales negotiation process starts and ends with AutoSaver.com.?
After a year in development, AutoSaver.com has finally launched TradeVUE?, an instant vehicle appraisal for consumers – accessible right from the dealer?s website. TradeVUE? provides a simple method for consumers to appraise their vehicle in just 3 easy steps. Each time a new appraisal is received, AutoSaver.com collects information from the customer and sends it to the dealer for follow up. ?Our TradeVUE? is a great way for dealers to provide value to their website visitors while also collecting pertinent contact information within a low stress environment?, says White.
In addition to these recently introduced products, AutoSaver.com provides consumer facing price validation on dealer websites and vehicle marketing via AutoSaver.com as a part of their MarketVUE? suite. The cost for the entire program starts at just $79 per month, or $699 for an entire year. In an effort to ?level the playing field? for independent dealers, AutoSaver.com is providing early adopter pricing along with a free 60-day trial.
AutoSaver.com provides intelligent consumer facing buying reassurance products to auto dealers, which includes independent price validation and appraisals using proprietary Value Range Price? technology. The company was founded in 2011 and is based in St. Augustine, Florida.
Young, starry-eyed startup founder comes in to pitch investors for funding.
He clicks crisply through his deck. He describes his product (patent-pending, of course), its features, benefits, and how 1% market share is enough to place everyone in the company on the Forbes list of richest people in the world.
Then the team slide comes up on the screen and the entrepreneur puffs up his chest, clears his throat, and announces that (just so you know) the CTO (or some other C-Suite position) of the company is an ex-IBM executive (or an ex-HP executive, or any other big, public company).
He pauses and looks around the room proudly. Almost as if he was expecting a standing ovation.
Oh, by the way, the company has raised $20 million so far, burned more than 50% of that on overhead (logo design, focus groups, salaries, and such), and hopes to have a minimum viable product in 24 months. Just as soon as this round of funding is completed.
See any problem with this picture?
Several actually. Let?s address just one today.
If you haven?t taken your product and service to market, if you do not yet have product-market fit, hiring an ex-Google COO to impress potential investors will almost certainly spell doom for your startup.
One, your startup IS NOT a smaller version of a big, public company (HT Steve Blank). Your social media startup and Facebook are two totally different animals. One is a cute, needy kitten; the other is a full-grown lion. Your startup (the kitten) has different needs and needs a different set of competencies than a fully-functioning company.
Second, drawing from one above and quoting Ben Horowitz in his must-read book, ?the job of a big company executive is very different from the job of a small company executive.?
To a big company executive (used to big budgets), that $2 million you plan to raise to take your product to market is just furniture allowance.
Former big company executives come with big company habits that could be deadly to your startup. Habits like sending everything to focus groups, analysis paralysis, bureaucracy, ego mania, and waiting for things to happen instead of making things happen (among others).
Bottom line: buyer beware.
Yes, you might need an Eric Schmidt or Sheryl Sandberg for ?adult supervision? However, hire one with your eyes wide open and only when your startup has taken off and is approaching cruising altitude.
iMD Companies, Inc., Closes Acquisitions with Lumz’nBlooms, Ltd., a Manufacturer of Specialized CommercialAgricultural, Indoor Gardening and Hydroponic GrowingEquipment to the Medical Marijuana Mark
TAMPA, FL,?April 10, 2014?/PRNewswire/ -?iMD Companies, Inc. (OTC:?ICBU) Board of Directors are pleased to announce they have closed these acquisitions from Lumz’n Blooms, Ltd. a Manufacturer and distributor of products and services for commercial and private growers.? General terms of the deal include a cash component to be paid by iMD Companies, 10 MM shares of restricted stock and incentive bonuses based on performance.? Founded in 2006, Lumz’n Blooms, LTD. has a grown its business year over year and generated revenues of over?$2 million?in 2013 with positive cash flow.
These acquisitions will enable Lumz to meet its growing demand and expand iMD’s footprint in the emerging “growers” market. Lumz brings expert staffing as well as an established and solid customer base to the iMD. And will provide a “core” operating business.?? The capital infusion and corporate support will allow Lumz to take advantage several lucrative opportunities that have evolved as a result of successful marketing efforts.?? iMD’s and Lumz goals are extremely complimentary and these acquisitions should add significantly to both revenue and earnings going forward.
Lumz’n Blooms, LTD.’s main products allow consumers to “Bring the Sun Indoors”.? Lighting, ballasts, growing materials are considered the “Pickaxe and Shovel” of the “Green Rush”.? Over the past 7 plus years Lumz’n Blooms has developed strong distribution channels and today counts?Central Garden and Pet, HomeDepot.com, Amazon Prime, Bi-Mart, Orchard Supply?as well as hundreds of independent Nursery, Hardware and Hydroponic Retailers among its customers.? These established distribution channels, combined with their extensive product line and industry knowledge, makes Lumz’n Blooms a foundational acquisition for building future growth.
“Our goal is to have Lumz’n Blooms, LTD. products be the most widely distributed brands in the industry and first on the shelf at mainstream retailers. Large retailers have realized the magnitude of this growing market and are contacting Lumz to fill the gap,? iMD provides us the platform required to make this happen”, stated?Brian Tucker President?of Lumz’n Blooms, LTD For more information go to??www.TuckersPride.com?and?www.InHomeGardening.com
Larry Robertson CEO of ICBU stated, “This acquisition will give us the opportunity to expand our product lines directly into the mainstream market for indoor Hydroponic growers, and Indoor Gardens. By owning Lumz’n Blooms, we will exponentially increase our distribution channels for both the Lumz products as well as the EMC-5000 systems, which is the flagship product of R-Quest Hydroponics, our joint venture with Anything Technology Media, Inc. (OTC:EXMT). ?This acquisition will enable Lumz the ability to expand its presence at trade shows, provide co-op advertising for major retailers, support retail trials, promote product through print, social and other media outlets, develop POS displays, as well as new product development. “This will afford Lumz the ability to expand its presence at trade shows, provide co-op advertising for major retailers, support retail trials, promote product through print, social and other media outlets, develop POS displays, as well as new product development.”
About iMD Companies, Inc. iMD Companies, Inc., (OTC MARKETS: ICBU) is a?Florida?corporation, engaged in the medical diagnostics and health industries.?The company is has recently re-positioned to be a holding company for acquisitions in the medical and marijuana industry.? Recent acquisitions in those areas are R-Quest Hydroponics Inc. and Greenlinks Inc. Currently the primary products and services lie in the health and medical diagnostics markets. The company and the principals of the management team have extensive backgrounds in finance, new technologies, manufacturing, marketing and distribution.?? ICBU’s goal is to create and increase shareholder value by tactically growing our core Hydroponics business while strategically seeking to acquire new businesses and create other business alliances, which generate increased revenues and earnings.
About R-Quest Hydroponics, Inc. R-Quest Hydroponics, Inc., is a Hardware and Software Manufacturing Company with its headquarters in Placerville, California.? R-Quest Hydroponics, Inc. has developed the new Environmental Master Controller EMC-5000 system, which is able to provide constant management for grow room facilities for indoor gardens. The EMC-5000 was developed so that growers can rest easy with the confidence that their crop is in excellent hands. The EMC-5000 is able to regulate and control all aspects of an indoor grow system, including Light cycles to optimize growth, Fans, Nutrient pumps, and CO2 level controls to help manage grow rooms. To see more information on the EMC-5000 go to?www.r-questhydro.com?.
There is often a misconception that EBITDA is synonymous with cash flow. While most seasoned deal professionals are careful to remember the distinction, some company owners (or entry-level analysts) can benefit from a friendly reminder.
The EBITDA metric gained prominence with the arrival of the?LBO?industry in the 1980?s, as buyout firms used it to estimate how much debt a company could take on, a key component of the LBO strategy. While EBITDA has become standard in company valuation ? purchase prices and loan covenants are often quoted as multiples of EBITDA ? the metric is not uniformly defined under GAAP standards and its calculation varies from company to company. This variation can lead to disparities and misunderstandings about the true cash-generative abilities of a business.
EBITDA does not take into account any capital expenditures, working capital requirements, current debt payments, taxes, or other fixed costs which analysts and buyers should not ignore. The cash needed to finance these obligations is a reality if the business wishes to grow, defend its position, and maintain its operating profitability.
Here are three costs that are not included in the EBITDA calculation, and their omission tends to overstate operating cash flows:
Certain industries like heavy manufacturing, shipping, aviation, telecom, clean technology and oil and gas require heavy ongoing or up front investments in equipment. EBITDA does not take into account capex, the line item that represents these significant investments in plant and equipment.?Ignoring capital expenses to inflate EBITDA by $3.8B precipitated the bankruptcy of WorldCom. Essentially, the company capitalized operating expenses, allowing them to be depreciated over time, thus decreasing operating expenses and boosting EBITDA.
?The biggest problem I encounter is an over or underestimation of capital expenses for asset-heavy companies such as trucking. Adding back all depreciation for a company like this without leaving an allowance for capex can grossly overestimate the available cash flow. However, not adding back any depreciation can underestimate the cash flow, especially if the company uses accelerated depreciation,? advises Axial Member?Jaime Schell?of?Plethora Businesses. There have been more insidious cases of companies manipulating depreciation schedules to inflate EBITDA, such as?Waste Management in the mid-nineties extending the useful lives of its garbage trucks and overstating their salvage value.
Working Capital Adjustments
Businesses need to invest revenue back into the company to keep expanding. EBITDA does not account for changes in?working capital?and the cash required to run the daily operating activities. Ignoring working capital requirements assumes that a business gets paid before it sells its products. Very few companies operate this way. Most businesses provide a service and get paid in arrears. Ideally a business collects up front for its services and pays in as much time as possible to remain as liquid as possible and to quickly reinvest cash into profitable investments like inventory purchases. This relationship between sources and uses of cash speaks to a company?s ability to take on more projects such as higher debt payments in the case of an LBO.
While EBITDA is useful in that it allows for a back-of-the-envelope comparison of two companies with similar business models or in the same industry, a?2000 letter to Berkshire Hathaway shareholders written by Warren Buffet?put EBITDA in its place: ?References to EBITDA make us shudder?We?re very suspicious of accounting methodology that is vague or unclear, since too often that means management wishes to hide something.?
David Simmons at Forbes magazine once called EBITDA the ?device of choice to pep up earnings announcements.? It does not exist in a vacuum and is irrelevant on a standalone basis. It does help when comparing similar companies under time constraints, but is by no means a thorough valuation tool when making an important investment decision.
Wikipediia defines ?”Logistics“?as the management?of the flow of resources?between the point of origin and the point of consumption in order to meet some requirements, for example, of customers or corporations.
Here is a?fascinating?look “under the hood” as to how Amazon does it.