This is a reprint of a post I originally made in realcent. This post is not intended as investment advice. I am not an advisor. Do your own due diligence. And pay particular attention to the risk factors.
I have received this via the usual channels:
This prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. No securities commission or similar authority in Canada, the United States or elsewhere has in any way passed upon the merits of the securities offered hereunder and any representation to the contrary is an offence. This prospectus does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. This offer is not being made to, nor will subscriptions be accepted from or on behalf of, holders of shares or rights of Somali Pirates PLC (“SPP”) in any jurisdiction in which the making or acceptance thereof would not be in compliance with the laws of such jurisdiction. However, SPP may, in its sole discretion, take such action as it may deem necessary to extend this offer to such jurisdictions. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a US person (as defined in Regulation S issued under such Act), except in exempt transactions under that Act.
Units offering
Somali Pirates Income Fund
Minimum CAD 750,000
Maximum CAD 1,500,000
Private Offering of up to 5,000,000 units
Somali Pirate PLC (“The Company”) is offering up to 5,000,000 units for purchase at a unit price of CAD0.30. Each Unit consists of one Share and one half of a Warrant in a proposed new company (Somali Pirate Income Fund, or “SPIF”). Each full Warrant will allow the holder to purchase an additional share of SPIF at an exercise price of CAD 0.60 on or before April 1, 2012. This offer expires October 1, 2010 (the “Expiration Date”). The Offering is conditional upon a minimum subscription for 2,500,000 Units, equal to CAD $750,000 being received within 90 days from the date of the final receipt for this prospectus. In accordance with regulatory policy, related parties (officers, directors, shareholders holding more than 10% of the outstanding Common Shares and their associates and affiliates) may not through the purchase of Units increase their respective percentage shareholdings in SPIF in excess of that percentage held by them in the Company. The Subscription Price of the Units was set by the Board of Directors of the Company and determined by them to be in their opinion less than the fair value of the Common Shares as at the date of this Prospectus.
This Offering is not underwritten nor is an agent representing the Company in making this Offering. The Company, on its own behalf, will be offering the Units to the holders of Common Shares of the Company, as well as other investors who qualify under the Securities Act. Subscriptions will be received subject to rejection or allotment in whole or in part and the Company reserves the right to close the subscription books at any time without notice.
This prospectus qualifies the distribution of the Units and of all of the Common Shares issuable upon exercise of the Warrants. The Offering is subject to the approval of certain legal matters by Poynt & Chute, Barristers and Solicitors, Toronto, Ontario, on behalf of the Company.
It is expected that definitive certificates evidencing the Common Shares issued pursuant to exercise of the Units will be available for delivery forthwith after the closing of this Offering. All funds received shall be held in trust by a Subscription Agent, the identity of whom is undisclosed in order to prevent asset seizure or destruction, until the minimum amount of the offering has been received.
Upon receipt of the minimum amount by the Subscription Agent, all funds shall be released to the Company. If the minimum is not received within 90 days from the date of the final receipt for this prospectus, all proceeds shall be returned to the subscribers without deduction or interest.
The Company
Somali Pirate PLC (“The Company”) was incorporated on October 21, 2009. Prior to this time, the Company operated as a community collective. Its business ventures had resulted in over $1 million (US) in revenues at the time of incorporation. After incorporation and local fund raising, further business activities resulted in revenues of a further $2.5 million (US), one half of which was disbursed to investors as set out in the original agreement. An analysis of the business operating regime suggested that the ability to raise larger amounts of capital could result in an expansion of the geographical range of the Company’s business model, with concomitant increases in business revenue.
Somalia is a country which is currently engaged in civil war. The current government regime is highly favourable to the business of the Company.
Business of the Company
The Company’s area of operations are in the Gulf of Aden, off the coast of Somalia. The Company has acquired exclusive licence to exploit block 2-G, which covers an area of 5,000 square kilometres across several shipping routes. The Company is in the business of capturing foreign vessels and ransoming the personnel, vessels, and cargo.
Use of Proceeds
The Company intends to use the proceeds of this financing to acquire assets required to carry out its business, to fund its ongoing business operations, and to carry out the legal filings required to acquire a public listing.
Risk Factors
In addition to normal business risks, the purchase of Units of the Company may be considered speculative for the following reasons:
1. There is presently no market through which the Common Shares or Warrants of the Company may be sold.
2. Although the Company has paid dividends in the past, there is no guarantee that the Company will be able to pay dividends in the future.
3. In order to carry out its operations, the Company needs to acquire certain materials which are affected by the current arms blockade of Somalia. There is no guarantee that the Company will be able to acquire these materials, and this may negatively impact the business of the Company.
4. The Company operates in a marketplace where significant competition exists. The Company competes with larger companies which have greater assets and financial and human resources than the Company, and which may be able to sustain larger losses than the Company to develop business. There is no assurance of the Company’s ability to contend successfully with such forces.
5. Shareholders of the Company should be aware that they will be relying on the good faith, expertise, and judgment of the Company, as well as its officers and directors, to make appropriate decisions with respect to investments and operations.
The officers and directors of the Company.
6. The Company is dependent on maintaining its key staff to develop its operations in Somalia. The Company does not have any long-term employment agreements nor any key-man insurance on any such key staff. Loss of key staff would likely have a significant adverse impact on the advancement of the Company’s business.
7. Investing in companies in a development stage is highly speculative and involves substantial risks, which even a combination of experience, knowledge and careful evaluation may not be able to avoid. There is no assurance that commercially viable targets will be discovered within the Company’s field of operations. The long-term prospects of the Company will be in part directly related to the cost and success of the exploration programs which may be affected by numerous factors. While the rewards can be substantial, numerous companies are unsuccessful and their shares may become worthless.
8. The Company may require additional equity funds to finance either ongoing or expanded operations. There is no assurance that such additional equity capital will be available to the Company when required or, if available, will be available on reasonable or satisfactory terms. In such circumstances, the Company’s interests in its properties could be substantially diluted or even lost.
9. The Company is affected by numerous factors beyond its control. These factors include the cost of labour, materials and services, cost of financing, technological change, and government regulation, including regulations relating to prices, taxes, royalties and environmental protection, the exact effect of which cannot be accurately predicted. Such factors may not be able to be overcome even by a combination of experience, knowledge, and careful evaluation.
10. Environmental legislation in Somalia is evolving in a manner which increasingly involves strict standards of enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their employees, officers and directors. Such legislation often involves control of hazardous materials, emission controls, and remediation obligations. The Company's policy is to monitor environmental legislative and regulatory requirements and to ensure that its exploration and other activities meet or exceed such requirements. The Company is not aware of any non-compliance to date. However, there is no assurance that changes in or regulatory requirements will not result in non-compliance in respect of existing and ongoing activities or that notwithstanding the Company's efforts events or incidents of non-compliance will occur. The effects of such risks cannot be predicted at this time.
11. The Gulf of Aden has recently come under the self-appointed jurisdiction of several extranational organizations. These organizations include, but are not restricted to, the United States Navy, the European Union Navy, the British Navy, the Indian Navy, the Chinese Navy, and the Turkish Navy. The operations of these organizations may lead to losses of the Company’s material and personnel, which may have a significant adverse impact on the advancement of the Company’s business.
12. The principal operations of the Company are anticipated to be in Somalia, a foreign country. Accordingly, the operations of the business in Somalia will be subject to risks associated with a company carrying on business in Somalia. These include risks of changes in environmental legislation or policies; expropriation; changes in foreign investment policies; and political risks. The laws of Somalia are different than the laws of Canada and the differences may be material. Moreover, the legal and court system in Somalia may not provide the same types of remedies which are available in Canada. A change in government or a change in policy by the government may significantly adversely affect the Company’s business or property rights. In addition, foreign properties, operations and investments may be adversely affected by local, political and economic developments, including nationalization, laws affecting foreign ownership, government participation, royalties, duties, rates of exchange, exchange controls, currency fluctuations, taxation and new laws or policies as well as laws and policies of Canada affecting foreign trade, investment and taxation.
13. In the event that the Company enjoys significant successes, operations of the Company will be affected by the fluctuations in the value of the United States dollar and the Somali shilin. Currently, most revenues of the Company are denominated in United States currency. However, most of the Company’s operating costs are currently in Somali shilin. Furthermore, in the event that SPIF begins paying dividends, these will be paid to Canadian investors in Canadian dollars. Accordingly, in addition to fluctuations in the price of cargos and the value of hostages, the Company could also be affected by changes in the relative values of Somali shilin, the Canadian dollar, and the United States dollar. The Company does not currently hedge against foreign currency fluctuations and has no present intention of entering into any such hedging activities.
Legal Matters
The Company is not party to any legal proceedings nor, to the knowledge of management, are any proceedings currently contemplated. Certain legal matters relating to the offering will be passed upon by Poynt & Chute, Toronto, Canada. As at December 21, 2009, the partners and associates of Poynt & Chute beneficially own, directly or indirectly, no Common Shares of the Company.
I have received this via the usual channels:
This prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. No securities commission or similar authority in Canada, the United States or elsewhere has in any way passed upon the merits of the securities offered hereunder and any representation to the contrary is an offence. This prospectus does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. This offer is not being made to, nor will subscriptions be accepted from or on behalf of, holders of shares or rights of Somali Pirates PLC (“SPP”) in any jurisdiction in which the making or acceptance thereof would not be in compliance with the laws of such jurisdiction. However, SPP may, in its sole discretion, take such action as it may deem necessary to extend this offer to such jurisdictions. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a US person (as defined in Regulation S issued under such Act), except in exempt transactions under that Act.
Units offering
Somali Pirates Income Fund
Minimum CAD 750,000
Maximum CAD 1,500,000
Private Offering of up to 5,000,000 units
Somali Pirate PLC (“The Company”) is offering up to 5,000,000 units for purchase at a unit price of CAD0.30. Each Unit consists of one Share and one half of a Warrant in a proposed new company (Somali Pirate Income Fund, or “SPIF”). Each full Warrant will allow the holder to purchase an additional share of SPIF at an exercise price of CAD 0.60 on or before April 1, 2012. This offer expires October 1, 2010 (the “Expiration Date”). The Offering is conditional upon a minimum subscription for 2,500,000 Units, equal to CAD $750,000 being received within 90 days from the date of the final receipt for this prospectus. In accordance with regulatory policy, related parties (officers, directors, shareholders holding more than 10% of the outstanding Common Shares and their associates and affiliates) may not through the purchase of Units increase their respective percentage shareholdings in SPIF in excess of that percentage held by them in the Company. The Subscription Price of the Units was set by the Board of Directors of the Company and determined by them to be in their opinion less than the fair value of the Common Shares as at the date of this Prospectus.
This Offering is not underwritten nor is an agent representing the Company in making this Offering. The Company, on its own behalf, will be offering the Units to the holders of Common Shares of the Company, as well as other investors who qualify under the Securities Act. Subscriptions will be received subject to rejection or allotment in whole or in part and the Company reserves the right to close the subscription books at any time without notice.
This prospectus qualifies the distribution of the Units and of all of the Common Shares issuable upon exercise of the Warrants. The Offering is subject to the approval of certain legal matters by Poynt & Chute, Barristers and Solicitors, Toronto, Ontario, on behalf of the Company.
It is expected that definitive certificates evidencing the Common Shares issued pursuant to exercise of the Units will be available for delivery forthwith after the closing of this Offering. All funds received shall be held in trust by a Subscription Agent, the identity of whom is undisclosed in order to prevent asset seizure or destruction, until the minimum amount of the offering has been received.
Upon receipt of the minimum amount by the Subscription Agent, all funds shall be released to the Company. If the minimum is not received within 90 days from the date of the final receipt for this prospectus, all proceeds shall be returned to the subscribers without deduction or interest.
The Company
Somali Pirate PLC (“The Company”) was incorporated on October 21, 2009. Prior to this time, the Company operated as a community collective. Its business ventures had resulted in over $1 million (US) in revenues at the time of incorporation. After incorporation and local fund raising, further business activities resulted in revenues of a further $2.5 million (US), one half of which was disbursed to investors as set out in the original agreement. An analysis of the business operating regime suggested that the ability to raise larger amounts of capital could result in an expansion of the geographical range of the Company’s business model, with concomitant increases in business revenue.
Somalia is a country which is currently engaged in civil war. The current government regime is highly favourable to the business of the Company.
Business of the Company
The Company’s area of operations are in the Gulf of Aden, off the coast of Somalia. The Company has acquired exclusive licence to exploit block 2-G, which covers an area of 5,000 square kilometres across several shipping routes. The Company is in the business of capturing foreign vessels and ransoming the personnel, vessels, and cargo.
Use of Proceeds
The Company intends to use the proceeds of this financing to acquire assets required to carry out its business, to fund its ongoing business operations, and to carry out the legal filings required to acquire a public listing.
Risk Factors
In addition to normal business risks, the purchase of Units of the Company may be considered speculative for the following reasons:
1. There is presently no market through which the Common Shares or Warrants of the Company may be sold.
2. Although the Company has paid dividends in the past, there is no guarantee that the Company will be able to pay dividends in the future.
3. In order to carry out its operations, the Company needs to acquire certain materials which are affected by the current arms blockade of Somalia. There is no guarantee that the Company will be able to acquire these materials, and this may negatively impact the business of the Company.
4. The Company operates in a marketplace where significant competition exists. The Company competes with larger companies which have greater assets and financial and human resources than the Company, and which may be able to sustain larger losses than the Company to develop business. There is no assurance of the Company’s ability to contend successfully with such forces.
5. Shareholders of the Company should be aware that they will be relying on the good faith, expertise, and judgment of the Company, as well as its officers and directors, to make appropriate decisions with respect to investments and operations.
The officers and directors of the Company.
6. The Company is dependent on maintaining its key staff to develop its operations in Somalia. The Company does not have any long-term employment agreements nor any key-man insurance on any such key staff. Loss of key staff would likely have a significant adverse impact on the advancement of the Company’s business.
7. Investing in companies in a development stage is highly speculative and involves substantial risks, which even a combination of experience, knowledge and careful evaluation may not be able to avoid. There is no assurance that commercially viable targets will be discovered within the Company’s field of operations. The long-term prospects of the Company will be in part directly related to the cost and success of the exploration programs which may be affected by numerous factors. While the rewards can be substantial, numerous companies are unsuccessful and their shares may become worthless.
8. The Company may require additional equity funds to finance either ongoing or expanded operations. There is no assurance that such additional equity capital will be available to the Company when required or, if available, will be available on reasonable or satisfactory terms. In such circumstances, the Company’s interests in its properties could be substantially diluted or even lost.
9. The Company is affected by numerous factors beyond its control. These factors include the cost of labour, materials and services, cost of financing, technological change, and government regulation, including regulations relating to prices, taxes, royalties and environmental protection, the exact effect of which cannot be accurately predicted. Such factors may not be able to be overcome even by a combination of experience, knowledge, and careful evaluation.
10. Environmental legislation in Somalia is evolving in a manner which increasingly involves strict standards of enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their employees, officers and directors. Such legislation often involves control of hazardous materials, emission controls, and remediation obligations. The Company's policy is to monitor environmental legislative and regulatory requirements and to ensure that its exploration and other activities meet or exceed such requirements. The Company is not aware of any non-compliance to date. However, there is no assurance that changes in or regulatory requirements will not result in non-compliance in respect of existing and ongoing activities or that notwithstanding the Company's efforts events or incidents of non-compliance will occur. The effects of such risks cannot be predicted at this time.
11. The Gulf of Aden has recently come under the self-appointed jurisdiction of several extranational organizations. These organizations include, but are not restricted to, the United States Navy, the European Union Navy, the British Navy, the Indian Navy, the Chinese Navy, and the Turkish Navy. The operations of these organizations may lead to losses of the Company’s material and personnel, which may have a significant adverse impact on the advancement of the Company’s business.
12. The principal operations of the Company are anticipated to be in Somalia, a foreign country. Accordingly, the operations of the business in Somalia will be subject to risks associated with a company carrying on business in Somalia. These include risks of changes in environmental legislation or policies; expropriation; changes in foreign investment policies; and political risks. The laws of Somalia are different than the laws of Canada and the differences may be material. Moreover, the legal and court system in Somalia may not provide the same types of remedies which are available in Canada. A change in government or a change in policy by the government may significantly adversely affect the Company’s business or property rights. In addition, foreign properties, operations and investments may be adversely affected by local, political and economic developments, including nationalization, laws affecting foreign ownership, government participation, royalties, duties, rates of exchange, exchange controls, currency fluctuations, taxation and new laws or policies as well as laws and policies of Canada affecting foreign trade, investment and taxation.
13. In the event that the Company enjoys significant successes, operations of the Company will be affected by the fluctuations in the value of the United States dollar and the Somali shilin. Currently, most revenues of the Company are denominated in United States currency. However, most of the Company’s operating costs are currently in Somali shilin. Furthermore, in the event that SPIF begins paying dividends, these will be paid to Canadian investors in Canadian dollars. Accordingly, in addition to fluctuations in the price of cargos and the value of hostages, the Company could also be affected by changes in the relative values of Somali shilin, the Canadian dollar, and the United States dollar. The Company does not currently hedge against foreign currency fluctuations and has no present intention of entering into any such hedging activities.
Legal Matters
The Company is not party to any legal proceedings nor, to the knowledge of management, are any proceedings currently contemplated. Certain legal matters relating to the offering will be passed upon by Poynt & Chute, Toronto, Canada. As at December 21, 2009, the partners and associates of Poynt & Chute beneficially own, directly or indirectly, no Common Shares of the Company.
That is good but you forgot to list the directors bio and past glorious crowning achievements. How can I trust a board of directors that has not been schooled in the fine art of super tanker pirating and getting $20 million in ransom.
ReplyDeleteI believe London Business School has just such a program.
Delete