FGA DIGITAL ASSET INVESTMENTS
What is a digital asset investment?
A digital asset investment is one of two things;
1)When a digital asset such as a cryptocurrency is purchased
2) When an investment is made into a company where a digital asset such as a cryptocurrency is utilized.
The latter is what FGA does when partnering with a company that would be able to integrate into its ecosystem, we invest cryptocurrency that is owned by FGA into selected viable companies to initially strengthen their balance sheets.
When FGA makes a digital asset investment into a company it’s a tiered investment, meaning that the initial digital asset investment happens all at once and sits in escrow on the company’s balance sheet as a true asset and increases the company’s overall value. The second tier is the scheduled redemption of the cryptocurrency into fiat currency (US Dollars or Euros) for working capital purposes. This allows for FGA to incrementally deploy working capital into the company over the course of a predetermined time period as opposed to all at once, while allowing the company to strengthen their balance sheets.
FGA’s digital asset of choice is the Pecu Novus Coin which is a part of the Pecu Novus Digital Asset Network. The network allows for FGA to schedule coins to be placed in escrow with specific escrow release dates attached to them. This has proven to be the most effective, secure and transparent digital asset network for such transactions.
The digital asset investments range from US$1,000,000 to US$50,000,000 depending on the company, their value and needs.
The steps are pretty simple and as follows:
1. FGA receives the business plan or executive summary, website and other due diligence material to determine if the firm can be an asset to that company’s growth organically via our subsidiaries and strategic partnerships.
2. Once its determined that FGA can be an asset to that company then the firm evaluates the company as a whole, its industry, business plan or executive summary to come forward with a digital asset investment into the company that would be of value to the company achieving their growth goals.
3. Agreements are issued, liquidation/redemption schedule is agreed to in writing, digital assets are deployed and financial statements are updated.
4. Execution of the growth plan begins.
FGA are active investors and work very closely with the companies we make asset investments in so that the firm can assist them in building a strong foundation and executing on their growth initiatives while getting expert guidance along the way.
Through our subsidiaries and other business relationships, FGA has the ability to assist in growing the companies we invest in organically and become an asset with their capital raising endeavors via our relationships, this has proven to be a game changer.
FGA is agnostic to the industry as long as the company can integrate into the firms ecosystem, we do have a preference for companies in the smart technology, artificial intelligence, machine learning, cybersecurity, aerospace, aviation and automotive arenas.
Contact us at 646.397.0588 or via email at info at fgapartners.com
What is a Recapitalization?
A recapitalization is a change in a company’s capital structure, plain and simple. Recapitalization is often undertaken with the goal of making the company’s capital structure more stable, and sometimes to boost the company’s stock price, this can be done by issuing bonds or buying back stock. Companies that do not want to become hostile takeover targets may take steps to recapitalize by taking on a very large amount of debt, and issuing substantial dividends to their shareholders of their company. Now bankrupt companies usually need to recapitalize as a part of their reorganization plan that is set in place.
FGA can be an asset to companies that are seeking to recapitalize and that can be done via a digital asset investment.
What is Leverage Recapitalization?
In the corporate world, a leveraged recapitalization is a strategy that is used to ward off a hostile takeover. This is when a company incurs a significant amount of additional debt to repurchase stocks through a buyback program or distribute large dividends to their shareholders. The additional debt may cause the stock price to drop and make it less attractive to potential corporate raiders.
This is a form of a poison pill and does a couple of things, first it brings the amount of debt so high that the takeover price goes up right along with it and could act as a deterrent and it keeps the shareholder interest in tack in a hostile takeover situation.
Now leveraged recapitalizations are not only for publicly traded companies, this strategy is also used by privately held companies as a way of refinancing, generally to provide returns to the shareholders while not selling the company outright. These types of recapitalizations can be just minor adjustments to the capital structure or could also involve a change of control.
Although leveraged recapitalization is different in nature, FGA still has the ability to work with companies via digital assets as the companies can lever their companies as well as work towards the liquidation of the digital asset over time. This carries a yield that goes to FGA with a repayment schedule such as a high yielding bond would have but no equity is taken by FGA. It’s a pure debt vehicle for situations such as a leveraged recapitalization effort.