Category: Research

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Shares Small Cap

Zip Shares Still Cheap After Walking Away from Sezzle, But Its Fundamentals Are Getting Murkier

Business Strategy & Outlook:    

Zip’s focus is on maximizing its addressable market. Its business is more diversified than single-product buy now, pay later, or BNPL, players, with varieties in financing options, transaction limits, and repayment schedules. Customers enjoy simple sign-up and checkouts, high acceptance by retailers and flexible financing solutions to help better manage their cash flows. Merchant partners may benefit from increased conversion rates, basket sizes, and transaction frequencies. Zip has a revolving credit business in Australia. ZipPay finances up to AUD 1,000, and ZipMoney AUD 1,000 and above. It also boasts a broader merchant base including retail, home, electronics, health, auto, and travel. Around 70% of revenue is derived from customers, mainly from account fees and interest. Meanwhile, Zip Business provides unsecured loans of up to AUD 500,000 to small and midsize enterprises. 

Zip adopts an installment financing model overseas, helping it scale up faster and keep up with competition in the underpenetrated global BNPL landscape. The acquisition of U.S. based Quad Pay materially boosts its growth prospects. It also operates in the U.K., Canada, Europe, Mexico, and the Middle East. Zip enhances customer stickiness via ongoing product add-ons. It has a Pay Anywhere function that lets users transact at a wide variety of avenues without being confined to merchant partners. Users also benefit from promotional offers, cash-back deals, or free credits. Newer features include crypto trading, credit reporting, and savings accounts. For merchant partners, Zip invests in co-marketing to help them acquire new customers. Zip has strong earnings prospects, but its margins will be increasingly under pressure and it will not achieve the same penetration and transaction frequency overseas as it had domestically. While it benefits from the growth of e-commerce and increasing preference for more convenient/cheaper forms of financing, anticipated heightened competition to its products. The capital-intensive domestic business cannot scale up as quickly, its fee structure potentially creates friction for customers, and its product offering in the U.S lacks clear differentiation.

Financial Strengths:  

While credit stress is creeping up, Zip remains overall in reasonable financial health. As of March 2022, the net bad debt ratio for its core ANZ business sits at 3.40% of receivables, while arrears are at 2.29%. But as a reprieve, Zip’s current financial position would be bolstered by: 1) its March equity raise; and 2) avoiding absorbing Sezzle’s net losses. Its debt/capital ratio is 56%, while the ratio of equity/receivables has improved to 52% in fiscal 2021 from 8.1% in fiscal 2017. Zip’s bad debts should stay manageable in a major credit event. Unlike some peers, Zip conducts a greater degree of background check before onboarding customers, such as collecting bank statements and pulling in information from a credit bureau. Soft credit checks are similarly performed when onboarding new customers overseas. This helps compensate for the fact that its receivables are higher-risk due to them having longer repayment periods and higher transaction value (notably for Zip Money) or it having a Pay Anywhere model. Its installment businesses have shorter turnover periods and lower transaction values, meaning it can know much earlier (relative to credit cards) if customers have trouble making payments and can therefore amend its risk controls accordingly. Most its Australian receivables are funded by its asset-based securitization program, with undrawn facilities totaling AUD 401.9 million as of March 2022. It also has USD 168.1 million and AUD 119.5 million of undrawn facilities to fund U.S and Zip Business’ receivables, respectively.

Bulls Say:  

  • Zip is well placed to continue growing its transaction volume, given its variety in financing options and retailer base, as well as its Pay Anywhere model which provides a greater avenue to spend using its products.
  • Zip benefits from an accelerated shift to e-commerce, increased adoption of cashless payments, and a growing need among merchants for effective marketing amid a challenging retail backdrop.
  • Zip faces lower regulatory risks than its BNPL rivals, as it already conducts a greater degree of background checks and ZipMoney is already regulated by the National Credit Act.

Company Description: 

Zip is a diversified finance provider, offering consumer financing via a line of credit (via ZipPay and ZipMoney) and installment-based finance (via Quad Pay, Spotii, Twisto, and PayFlex); as well as lending to small to midsize enterprises (via Zip Business). Zip’s fortunes are largely tied to the buy now, pay later, or BNPL, industry. Most of its products–ZipPay, Quad Pay (Zip U.S.), and PayFlex–do not charge interest based on outstanding balances. Around 60%-70% of Zip Pay’s/Zip Money’s revenue is derived from customers, mainly via account fees and interest. Meanwhile, its installment businesses primarily generate revenue by receiving a margin from merchants, which compensates it for accepting all nonpayment risk and for encouraging consumers to transact more frequently.

(Source: Morningstar)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
Fixed Income

JPMorgan Climate Change Solutions Fund – Class A Units An investment style with a thematic focus on a UN Sustainable Development Goal

This product is likely to be appropriate for a consumer seeking capital growth to be used as a small allocation within a portfolio where the consumer has a high risk/return profile and needs daily access to capital. The minimum suggested holding period is 5 years.  To achieve a return through investing in equity securities of companies with exposure to the theme of climate change solutions.

Key Risk

The risk management function of JPMAM provides oversight, coordination, support and a consolidated view of risks and controls to senior management and executive management of the Manager. The function harnesses the support of the various risk management groups of JPMAM, with assistance from regional JPMAM risk personnel, which supervises credit risk arising from counterparty activities conducted on behalf of clients. All investments carry risk. Different strategies may carry different levels of risk, depending on the assets that make up the strategy. The value of the investment may fall for a number of reasons, including the risks set out below, which means that you may lose some or all of the investment. Before making an investment decision, it is important to understand the risks that may affect the value of the investment. While it is not possible to identify every risk relevant to investing in the Fund, that is detailed in the following table significant risks that may affect the investment. Assets with the highest long-term returns may also carry the highest level of short-term risk due to their generally larger fluctuations in returns. The level of risk for each person will vary depending on a range of factors including age, investment timeframe, other investments and risk tolerance. The financial adviser may assist you in determining whether the Fund is suited to the objectives, financial situation and needs including the level of diversification you need. The following table outlines the key risks of the Fund. Investment in the Fund is subject to investment risk, including possible delays in repayment and loss of income and capital invested.

Type of key risk:

  • Concentration Risk
  • Counterparty Risk
  • Thematic Risk
  • Hedging Risk

Fund Performance:

ESG integration process 

The ESG Data and Research Working Group vets and reviews the ESG integration approach of each investment group. The Working Group is chaired by the Global Head of Sustainable Investing, Jennifer Wu, and its members are senior portfolio managers, research analysts and investment stewardship specialists. The Working Group’s review is used to form recommendations that the Sustainable Investing team submit to the Sustainable Investing Oversight Committee (SIOC), which is responsible for approving or rejecting the ESG-integrated status of each investment group. This committee was established in 2021 as part of a comprehensive review of the sustainable investing governance practices, with a particular emphasis on structures for oversight of investment stewardship and ESG integration. Voting members of SIOC include the Chief Investment Officers (CIOs) of all applicable asset classes, thereby gaining oversight and assuming responsibility for the integration of sustainability risk related to the investment decision process. The ESG Data and Research Working Group, alongside the Sustainable Investing team, has developed a 10-metric framework to evaluate ESG integration progress at each critical step of a typical investment process. Investment groups are required to present their ESG integration approach to the Working Group. The process for determining which investment groups are ESG integrated has continued to evolve and improve with the development of the framework (see next page). To receive ESG-integrated status under the current methodology, the investment groups must receive an aggregate score of at least 30 points out of a total of 50 and, for each metric, receive at least a 2 on a scale of 1 to 5. If the investment group does not meet this threshold, the Working Group will discuss the improvements required before it can reapply at a later stage. For those that are successful, the score and feedback are used to form a recommendation that the Sustainable Investing team submits to SIOC for formal approval of the ESG-integrated status.

About the fund

Climate change is one of the biggest challenges that are faced as a society. But companies around the globe are rising to the challenge. Climate Change Solutions Fund invests in a high-conviction portfolio of the forward-thinking companies developing and scaling solutions to address the drivers of climate change, tapping into a wave of innovation across sectors and across the market cap spectrum, while supporting a sustainable future for us all.

(Source: Banyantree)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
LICs LICs

CDO provides exposure to an actively managed long/short portfolio

On 17 November 2021, CDO listed on the ASX. The Company raised $15.55m as part of the IPO Offer, issuing 5.6m shares at a price of $2.7716 per share (the mid-point of the of the NTA at 31 October 2021). The Company has 15.06m shares on issue and a market cap of $41.9m as at 30 November 2021.

The average stock in the ASX 200 is down over 15% whilst the index is down only 1%. Generally speaking, larger capitalization value-style stocks have held up well whilst smaller capitalization and growth-style stocks have experienced significant retracement and a reversal in trend.

CDO provides exposure to an actively managed long/short portfolio, with a long bias, of Australian and international securities. Cadence Asset Management Pty Limited (Cadence) is the Manager of the portfolio. Cadence manages the portfolio of Cadence Capital Limited, which listed in 2006, using a similar investment philosophy and process that is used for the CDO portfolio.  The Company has two stated investment objectives: (1) provide capital growth through investment cycles; and (2) provide fully franked dividends, subject to the Company having sufficient profit reserves and franking credits and it being within prudent business practices.

Cadence Opportunities Fund was down 2.1% in December, compared to the All Ordinaries Accumulation Index which was up 2.7% for the month. The Company has had a strong start to FY22 with the fund up 21.1% over the first six months of the year, outperforming the All Ordinaries Accumulation Index by 16.5%.

The Board has declared a 7.5 cents fully franked half year dividend, an annualized increase of 25% on last year’s ordinary dividends, reflecting the strong performance of the company over the current year. The current share price is $2.92 and interim dividend equates to a 5.1% annualized fully franked yield or a 7.3% gross yield. 

 (Source: FN Arena)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

DISCLAIMER for General Advice: (This document is for general advice only).

Categories
LICs LICs

VGI enters exclusivity and signs a merger term sheet with Regal Funds Management

VGI Partners Limited (VGI:ASX, “VGI”) announces that it has  entered exclusivity and signed a non-binding term sheet with specialist alternative investment manager Regal Funds Management Pty Limited (“Regal”) in relation to  the proposed merger  of  VGI  and Regal  (the “Proposed Merger”).  The Proposed  Merger  would combine two of Australia’s most recognised and successful hedge fund managers and create a market-leading provider of alternative investment strategies with total funds under management of over A$6 billion.

The Proposed Merger, which would be subject to VGI shareholder approval, would involve VGI acquiring 100%of Regal in consideration for  the issue  of  new  ordinary  shares  in  VGI  to  existing  Regal  shareholders.  The anticipated shareholding of the merged entity at completion of the Proposed Merger, after adjusting for cash,liquid assets and other investments being respectively contributed, being approximately 60% current Regal shareholders and 40% current VGI shareholders. It   is anticipated that VGI would be renamed and its ticker changed to reflect the combined businesses on or after completion of the Proposed Transaction.

Entering into a definitive agreement remains subject to each of VGI and Regal completing confirmatory due diligence, the negotiation of  the  terms  of  a  binding  merger  implementation  agreement,  and  final  board approvals of each of VGI and Regal.

If   a merger implementation agreement is entered into, it is currently anticipated that conditions to completion of  the Proposed Merger  contained in  that  agreement  would include  VGI  shareholder  approval  by  way  of ordinary resolution for the purposes of section 611 item 7 of the Corporations Act 2001 (Cth) and any applicable ASX Listing  Rules,  an independent  expert  concluding that  the  Proposed Merger  is  reasonable for  VGI shareholders, and no material adverse change occurring in relation to either party.

Potential benefits  

If   the Proposed Merger proceeds, it has the potential to deliver several attractive benefits for VGI shareholders, including the following:

  • The creation of a market-leading alternative investment manager with over A$6 billion in funds undermanagement, with exposure to a diversified and growing platform of hedge fund, private market and real asset investment strategies for institutional, high net worth and retail investors in Australia and offshore
  • Combining  the  deep industry  experience,  networks,  and  the  long  investment  track  records  of  two industry leaders – Robert Luciano and Philip King – and their respective investment teams, coupled with  the management  teams  of  VGI  and Regal  and  their  history  in  creating innovative and well-regarded alternative investment products1 Includes institutional investors, family offices, charities, private investors and employees. 
  • Leveraging  complementary  client  profiles  and  relationships  across  the combined  group,  including existing long-term relationships with high net worth individuals and family offices within VGI and Regal, alongside a  combined retail  investor  base of  over  20,000 investors  across  VGI  Partners  Global Investments (ASX:VG1), VGI Partners Asian Investments (ASX:VG8) and the Regal Investment Fund(ASX:RF1)
  • Accessing  Regal’s  highly  developed corporate  platform and business  support  network,  including  a well-established marketing  and  distribution  capability,  to  provide a  refreshed approach  to  sales, marketing and communication activities across the merged entity and reduce non-investment related activities undertaken by Robert Luciano and the VGI team
  • Provide  an opportunity  for  Robert  Luciano  and  the  VGI  investment  team  to  leverage  additional resources from the merged group, including Regal’s extensive investment capability and track record investing in Asian equity markets and private unlisted investments.

Governance

The non-binding term sheet entered into by  VGI  and Regal  contemplates  that  following completion  of  the Proposed Merger, the merged entity will have a Board consisting of six Directors, with two nominated by each of VGI and Regal in addition to the appointment of two external independent directors. Neither Robert Luciano nor Philip King will be on the Board of the merged entity given their investment focussed roles. An executive committee for the merged entity will be drawn from both VGI and Regal.

Exclusivity 

VGI has granted Regal a period of six weeks of exclusivity on customary binding terms which include no shop,no talk, and no due diligence restrictions (subject to required customary fiduciary exceptions), and an obligation for VGI to notify Regal if it receives a competing proposal. Details of the exclusivity arrangements are set out in Annexure A to this announcement.

About VGI Partners

VGI Partners Limited is a high conviction global equity manager that was founded in 2008 to invest capital for high net worth individuals and family offices. Today, VGI is also the Manager for two Listed Investment Companies: VGI Partners Global Investments Limited (ASX:VG1) and VGI Partners Asian Investments Limited (ASX:VG8). Listed on the Australian Securities Exchange since 2019, VGI has offices in Sydney, New York and Tokyo.

 (Source: FWarena)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Fixed Income Fixed Income

Fund which provide stable return, diversification by investing bonds

To invest in a diversified portfolio of government and corporate bonds that aims to deliver relatively stable returns with less fluctuation than investing in shares and property.

Approach

FirstChoice Fixed Interest applies a steady multi manager approach, investing in a diverse line up of Australian and global fixed-interest managers. Portfolio returns are driven by the combined effect of blending different active management styles with passive strategies, aiming to achieve style diversification. 

The CFS Investments team decides each manager’s strategic weighting in the portfolio after determining outcomes in the trade-off between potential outperformance and risk. Changes to the strategic weights must first receive approval from the investment committee. External manager screening begins with Mercer’s manager research efforts, which are used to initially screen most managers to build a quality short-list universe. For internally generated ideas, Mercer is also used as an initial sounding board. The team maintains constant dialogue with Mercer about ratings changes and portfolio construction. It then drills down further into the research on short-listed managers, including overseas travel for onsite visits. The team is responsible for manager selection, mix, portfolio review, and monitoring. Portfolio rebalancing to target-weighted manager allocations occurs daily, and tolerance levels are used to avoid unnecessary trading. 

Portfolio

This portfolio invests its funds with seven underlying managers. At November 2021, allocations included a global-aggregate strategy from Wellington (19%) and Morgan Stanley (9.5%), bottom-up global credit strategies from Loomis Sayles (10%) and Franklin Templeton (12.5%), and global sovereign and currency strategies from H2O (9.5%), and Colchester (11.5%). Passive indexed Australian bond exposure is run by First Sentier (28%). Active allocation was reduced from 13% in 2016 to 8% and finally removed altogether in February 2020 following the departure of senior investors in Louisville, Kentucky. The style diversification of managers alongside some passive exposure makes for a durable portfolio suitable as a core holding but one that may also lead to benchmark-like returns.

Performance

FirstChoice Fixed Interest has a solid long-term record, in particular since the global financial crisis. It is ahead of the peer group average and ahead of its own 50/50 composite benchmark net of fees, made up of the FTSE World Broad Investment Grade Index (hedged to AUD) and the Bloomberg AusBond Composite 0+Yr Index. The strategy has consistently outpaced most peers over the long term, though in 2014 and 2015, it trailed the index as bond yields fell, with First Sentier detracting because of a short-duration stance on Australian rates. Colchester’s underweighting in Europe, Japan, and the UK hurt as their yields continued to fall in the first half of 2016. Colchester staged a rebound in the second half that continued through 2017. As in 2017, strong performance from H2O was a key driver of outperformance for the strategy in 2018. This continued into 2019 with H2O contributing significantly to outperformance. The year 2020 was a challenge, with the coronavirus pandemic causing havoc in global markets, Franklin Templeton contributing negative, and below-index performance for the year. 2021 has been difficult, with bond market sell-offs during February and October creating large drawdowns category wide for managers with meaningful duration exposure. Still, over the trailing three-, five-, and 10-year periods to November 2021 the strategy remains in the top quartile for performance.

Top 10 Holdings of the fund

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About the fund

To provide relatively stable returns with low potential for capital loss by investing in Australian and global fixed interest securities .To outperform the composite benchmark of 50% FTSE World Broad Investment Grade Index, hedged to Australian dollars and 50% Bloomberg AusBond Composite 0+Yr Index over rolling three-year periods before fees and taxes

The investments are managed by a number of leading fixed interest managers comprising an index manager whose investments aim to mirror the index, and active managers who aim to outperform the index. This is designed to deliver more consistent returns with less risk than would be achieved if investing with a single investment manager. The portfolio aims to hedge currency risk.

 (Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
LICs LICs

AMCIL Limited – Closed Ended Investment Fund

AMCIL is a medium to long-term investor in the Australian equity market. Its investment approach is to construct a focused portfolio in which large and small companies can have an equally important impact on investment returns. The market perception of AMCIL’s future earnings potential and dividend. Supply and demand for shares at any one time can fluctuate because of the liquidity in the shares, investor sentiment and expected future performance. Their consistent after tax paid investment returns achieved over the long term. 

Portfolio Holdings 

Investment Team 

The group has and experience board of directors and consisting members which are portfolio manager Kieran kennedy, David Grace, Brett McNeil and Financial Analyst are jaye Guy, olga Kosciucyzt, stuart Low, Nga Lucas. AMCIL’s corporate objective is to provide shareholders with returns that exceed the market over the medium to long term through through strong capital growth in the portfolio over the medium to long term together with the generation of dividend income.

Company Profile 

AMCIL Limited is an investment company. The Company invests in various sectors, which include energy, materials, industrials, consumer discretionary, consumer staples, banks, other financials and real estate, telecommunications, healthcare, information technology and utilities.

(Source: BanyanTree)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
IPO Watch

ACDC Metals on the highway to ASX listing

The explorer is seeking to raise $8 million through an initial public offering (IPO) of 40 million shares at $0.20 each, which would give it a market capitalization on listing of $14.5 million.

Mineral sands projects

ACDC’s three Murray Basin projects have been discovered across two styles: strandline, which are narrow, long and high-grade deposits containing zircon and titanium; and Wimmera industrial minerals (WIM) style, which sit as planar and extensive, with significant monazite (REE) content.

Previous work was undertaken in the late 1980s and early 1990s at Goschen Central, located 50km south-southwest of Swan Hill in northern Victoria, with early drilling targeting high-grade coarse-grained strandline style deposits. A large WIM-style heavy minerals deposit was defined within the south-west quadrant of the exploration licence.

ACDC notes another explorer reviewing a similar area in 2002 had estimated zircon grades of 20-27% with additional REE and titanium minerals.

ACDC’s Douglas project comprises two exploration licences: Acapulco and Chetwynd, which had planned to be mined by historical owners by projects were halted due to prevailing commodity prices at the time.

Post-listing, the company plans to define a JORC 2012-compliant resource and undertake scoping and feasibility studies at both Goschen Central and Douglas.

A drilling program is also planned at ACDC’s third project, Watchem, a strandline-style deposit that lies in close proximity to the Donald mineral sands project owned by Astron Corporation (ASX: ATR).

Medallion monazite process

Under a definitive agreement signed in October, ACDC was granted the right to use Medallion’s proprietary monazite processing technology to extract REE from monazite sourced as a by-product of heavy mineral sand production.

The licence agreement included the issue of 4.5 million ACDC shares to Medallion, bringing Medallion’s shareholding in ACDC to about 15% (pre-IPO). Upon successful completion of a pilot plant utilising the Medallion monazite process, the company will receive an additional 2.5 million ACDC shares by converting performance shares.

To take advantage of this technology, ACDC plans to construct a mineral sand monazite processing plant for south-eastern Australia

Upon commercial production, Medallion will be able to convert other performance rights into an additional 750,000 ACDC shares. Following full conversion, Medallion would own 8.05 million shares of ACDC.

Medallion also has the right to purchase or place up to 20% of the ACDC shares issued in the IPO subject to approval of the lead underwriter and Medallion’s diluted ownership not exceeding 19.9% of ACDC’s issued share capital (including the conversion of all performance rights).

In addition, ACDC will pay Medallion a 2% royalty on the sale of mixed REE compounds and other minerals produced by the company’s projects and processed using the Medallion monazite process.

Company Profile

ACDC holds three mineral sand projects on the edge of the Murray Basin in western Victoria – Goschen Central, Douglas and Watchem – where past drilling has demonstrated zircon, leucoxene, rutile and monazite mineralization.

Raised funds from the IPO will be divided between the three projects for drilling and further exploration studies, in addition to monazite processing, which involves extracting and separating REE from monazite mineral sands using technology exclusively licensed from Canada-based Medallion Resources (TSX-V: MDL). Proceeds will also be allocated to corporate and working capital.

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
ipo IPO Watch

Orpheus Minerals launches $6m IPO to fund domestic uranium Exploration to ASX listing

Orpheus has launched a $6 million initial public offering to kick-start exploration and provide funds for it to chase high-grade sandstone or sediment-hosted and unconformity (hard rock) deposits.

Portfolio of assets

Argonaut has compiled a portfolio of assets within Orpheus and its wholly-owned subsidiary Trachre through direct application as well as corporate transactions with tenement holders.

It includes early-stage projects at Frome/Erudina and Cummins (in South Australia) and Mount Douglas (Northern Territory) and new applications at Ranger-North East (30 kilometers from the decommissioned Ranger uranium mine), T-Bone (the broader area containing at least 13 uranium deposits and 15 occurrences) and Woolner.

The project generation initiative will focus on areas which have seen limited exploration since Australia’s uranium boom of the 1970s, with Orpheus targeting paleochannel and unconformity uranium deposits that are amenable to simple and economic extraction methods.

Orpheus said an opportunity exists to achieve “science-led exploration success” by leveraging new geophysical datasets in terrains which have lacked modern, systematic uranium exploration.

Uranium production

Last year, South Australia and the Northern Territory were responsible for the production of 4,192 tons of uranium, or approximately 8.7% of total world output.

Orpheus aims to capitalize on this success, led by an executive team with experience in the application of advanced techniques for uranium exploration and a track record of financing and developing resource projects around the world.

Underpinning the company’s strategy is a forecast increase in mid to long-term global demand for uranium in an environment where supply from stable jurisdictions (such as Australia) is currently in structural decline.

The World Nuclear Association has predicted demand will jump 27% from now until 2030 and a 38% from 2030 to 2040, with this demand expected to come mostly from the US, Europe or North Asia.

These regions use uranium in the production of zero-emissions power (meaning they do not directly output carbon dioxide during electricity production) and are considered to be viable and safe options for nuclear generation to meet increasing energy needs.

Company Profile

The company, which is a spin-out of Argonaut Resources (ASX: ARE), will also have a significant project generation budget with the aim to expand and build its pipeline.

Orpheus’ IPO will be based on the issue of a minimum 30 million shares at $0.20 each and will comprise a $3 million priority offer for Argonaut shareholders and a $3 million broker firm and general public offer. Argonaut will retain a 26.9% interest following completion of the offer. The offer is being led by Adelaide based broker Taylor Collison and Becketts Lawyers. Orpheus is expected to list on the ASX before month end using the ticker code ‘ORP’.

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
IPO Watch

Tiger Tasman Minerals seeks ASX listing to advance battery metal and industrial mineral projects

The company is especially hopeful that funds from its initial public offering (IPO) will enable it to advance a feasibility study at its flagship Iron Skarn polymetallic project in North Queensland.

ESG focus and battery metals demand

In a roadshow presentation, Tiger Tasman described its focus on multi-commodity metals essential to electrification and decarbonization as its point of difference. It has an environmental, social and corporate governance (ESG) centric business strategy targeting carbon-neutral status for its operations and a goal of joining the United Nations Global Compact.

The company presented data forecasting rapid growth in the battery market each year as the world continues to transition to electric vehicles, renewable energy generation and energy storage. It also pointed to a 100,000-times increase in demand for raw materials with charging station storage batteries containing more than 600kg of copper alone.

In the chairman’s letter of the prospectus, Tiger Tasman non-executive chairman Richard Beazley said demand for the minerals and metals the company is focusing its exploration efforts on is expected to be “strong” as they are essential to the electrification and decarbonisation of the global economy.

“The company has brought together a board and exploration team with a proven track record and diverse range of skills in the resources industry of Australia and abroad,” he added.

“This uniquely qualified team offers experience and success across the realms of exploration, development, finance and acquisitions and is poised to aggressively explore and develop the projects.”

Iron Skarn pre-development project

Tiger Tasman’s flagship pre-development Iron Skarn polymetallic project comprises one granted exploration permit located 40km from Townsville in the Barringha region of Queensland.

The 12sq km tenement is considered prospective for base metals and hosts the Iron Glen polymetallic skarn deposit, which has an existing JORC 2012 inferred mineral resource estimate of 1.92 million tonnes at 29.3% iron, and 2.9Mt at 13.1 grams per ton silver (outside of the magnetite skarn).

Significant exploration upside has been identified at the Lead Belly prospect, which Tiger Tasman believes could potentially expand the resource inventory.

Up to $1.03 million of the IPO funds (at maximum subscription) have been allocated to undertaking a feasibility study at the Iron Skarn project in the first two years following the company’s ASX listing.

Further exploration planned for the project includes geochemical studies and mapping of Lead Belly, as well as tenement compliance exploration.

Copper Canyon project

Another exploration priority for Tiger Tasman is the underexplored Copper Canyon copper-gold project, made up of 502 sq km under application in WA’s Paterson Province. It is regarded as a tier one exploration destination with neighbors including major companies such as Rio Tinto (ASX: RIO), Newcrest Mining (ASX: NCM) and Cyprium Metals (ASX: CYM).

More than $800,000 of the IPO funds has been earmarked for the Copper Canyon project with planned exploration to include mapping, surface geochemical sampling, heritage surveys, induced polarisation (IP) survey and data processing, as well as drilling of targets identified from the surveying.

Tiger Tasman considered the project “very favorable” in prospectivity, with two anomalies identified on the eastern and western boundaries of the tenement, as well as the number of tier one operating mines and discoveries within a 60km radius of the project (Nifty, Telfer, Winu, Havieron).

Other WA Exploration projects

Additionally, Tiger Tasman also plans to use a portion of its IPO funds for exploration at its three other early-stage projects in WA including detailed mapping, surface geochemical sampling, heritage surveys, IP survey and data processing, and planned drilling and assays in the first 12 months from IPO.

These projects include Fraser Range, located in WA’s Yilgarn Province about 60km from IGO’s (ASX: IGO) Nova nickel mine. At Fraser Range, Tiger Tasman is targeting lithium, nickel, copper and zinc.

Recent exploration work has mapped the presence of pegmatites and samples are awaiting assay to confirm lithium mineralization.

The project is 50Km from the Bald Hill lithium mine and Buldania lithium discovery in what is regarded as the “lithium belt” in WA.

Tiger Tasman’s Mt Minnie project is prospective for high-grade manganese in the Ashburton region where a 4km strike at surface is returning grades exceeding 40% manganese.

The company has mapped the targets and completed sampling at the project.

Over at the Crater project, Tiger Tasman is targeting copper, zinc, lead, silver and gold in the Earaheedy Basin.

Company Profile

It has also assembled rights to acquire 100% interests in Western Australian projects targeting battery and precious metals including lithium, copper, nickel, manganese, zinc, silver and gold.

Tiger Tasman is seeking to raise between $5.1 million and $8 million through the issue of 25.5 million to 40 million shares priced at $0.20 per share. Upon listing, the company is anticipated to have an indicative market capitalization of $9.57 million to $12.47 million (undiluted).

The company’s IPO launched last month and is scheduled to close in October. It expects to start trading on the ASX under the ticker code ‘T1G’.

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
Shares Small Cap

The Star Entertainment Group Limited, an integrated resort company, provides gaming, entertainment, and hospitality services in Australia

Investment Thesis:

  • Trading below blended valuation (DCF & EV/EBITDA multiple). 
  • Additional cost measures announced to support earnings.
  • Monopolies in the casino industry in SGR’s operating geographies and is one of the market leaders in other games such as slots.
  • Economic moat in the nightlife landscape in Sydney given regulatory environment (such as lock-out laws).
  • Diversified business base across different types of entertainment, hotels, retail stores and food & beverage establishments.
  • Strong tourism growth once borders reopen is expected to be a tailwind for SGR.
  • Lower AUD could improve international spending in domestic markets.
  • Domestic table games segment remains strong.

Key Risks:

  • Weakening VIP segment, potentially making Sydney less viable.
  • Further deterioration of consumer spending and household discretionary income 
  • Regulatory risks e.g., repeal of lockout laws could increase competition in the nightlife landscape in Sydney.
  • Establishment of a new Crown casino in Sydney will increase competition (especially amongst VIP customers) and could potentially dismantle SGR’s monopoly in Sydney.
  • Win-rate risk (if the casinos have a much lower win-rate than the mathematical expected value).
  • Potential scandals.

Key Highlights:

  • FY22 results summary. Compared to pcp: On a normalised basis, gross revenue declined -2% to $1.532bn, EBITDA declined -45% to $237m and NPAT was a loss of $32m (vs profit of $116m in pcp), impacted by Covid-19 related property shutdowns, operating restrictions, and border closures. Statutory net loss (post significant items) was $199m vs profit of $58m in pcp. Operating expenses increased +14% to $909m, reflecting Covid-19 related impacts, inflationary pressures, tight labour market and regulatory review costs (Bell Review, AUSTRAC enforcement investigation).
  •  Operating cash flow declined -61.5% to $181.3m with cash collection down -42% to 81%.  
  • Capex of $141m, within the guidance range of $125-150m and well below D&A expense of $208m. 
  • Balance sheet has ample liquidity position of $513m in cash and undrawn facilities. Net debt declined -2% YoY to $1.15bn, equating to gearing of 2.8x, with the Group fully compliant with June 2022 amended covenants and no covenant relief required for FY23 testing dates. (6) Final dividend scrapped.
  • By segments. Compared to pcp: Sydney revenue declined -6% to $781m and normalised EBITDA declined -60% to $82m, impacted by the closure of the property for 102 days and operating restrictions due to Covid-19, however, domestic revenues rebounded on opening with 4Q22 domestic revenue consistent with pre-Covid levels with slots revenue up +17% on pre-covid levels partially offset by -8% decline in domestic tables. 
  • Gold Coast domestic revenue was up +11% to $424m with non-gaming revenue up +50%, which combined with +27% increase in opex saw normalised EBITDA decline -20% to $90m. Domestic revenues rebounded in 4Q22, up +48% on pre-Covid level with slots revenue up +50%, domestic tables up +23% and non-gaming up +69%. 
  • Brisbane domestic revenue declined -6% to $326m and normalised EBITDA declined -43% to $65m, however, performance improved in April following removal of Covid-19 restrictions with domestic revenue in 4Q22 up +13% on pre-Covid levels with slots revenue up +26% while domestic tables down -4%. 
  • FY23 guidance and trading update. For FY23 capex of ~$150m (vs prior guidance of ~$175m), D&A expense of ~$200-205m, net funding costs of $60-65m and JV equity contributions of ~$115m.
  • Trading update (1 July 2022-18 August 2022) group domestic revenue increased +9% on pre-Covid levels (1 July 2019-18 August 2019) with Sydney domestic revenue in-line with pre-Covid levels, Gold Coast domestic revenue up +26% and Brisbane domestic revenue up +18%.
  • Key executive appointments. Robbie Cooke (ex-CEO Tatts Group and ex-MD Tyro Payments) appointed as MD and CEO. 
  • Scott Wharton appointed as CEO The Star Sydney and Group Head of Transformation.  

Company Description:

The Star Entertainment Group Limited, an integrated resort company, provides gaming, entertainment, and hospitality services in Australia. The Company operates through three segments: Sydney, Gold Coast, and Brisbane. It owns and operates The Star Sydney casino, which includes hotels, apartment complex, restaurants, and bars; The Star Gold Coast casino, which consists of hotels, theatre, restaurants, and bars; and Treasury casino in Brisbane that comprises hotel, restaurants, and bars. The company also manages the Gold Coast Convention and Exhibition Centre. The company was formerly known as Echo Entertainment Group Limited and changed its name to The Star Entertainment Group Limited in November 2015. 

(Source: Banyantree)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Laverne Investing. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Laverne and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Laverne and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Laverne and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Laverne and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Laverne and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Laverne and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Laverne and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Laverne and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Laverne and Banyan Tree.