Offering Summary
The following is a general overview of the Copper Moose Private Placement Offering. Complete details are offered in the Private Placement Memorandum, which is available upon request.
The following is a general overview of the Copper Moose Private Placement Offering. Complete details are offered in the Private Placement Memorandum, which is available upon request.
Issuer
Copper Moose Ventures, LLC, a Delaware limited liability company (the “Company”).
Management
The Company is managed by a Board of Managers (the “Board”) composed of five members (“Members”). Three Members are appointed by Zen Moose Capital, LLC (“Zen Moose”) and two Members are appointed by Copper Moon Equity, LLC (“Copper Moon”). Zen Moose owns 800 Class B Units of the Company and Copper Moose owns 200 Class B Units of the Company, representing all the issued and outstanding Class B Units.
Securities Offered
Class A Units are offered at $3,000,000 (the “Offering”). A minimum subscription of one Unit ($3,000,000) is required unless waived by the Company.
Minimum Offering
A minimum of 100 Class A Units must be subscribed for resulting in total gross proceeds to the Company of $300 million for the offering to be completed (the “Minimum Offering”). A maximum of _____ Class A Units are being offered, for a maximum total offering of $1 billion.
Voting and Management Rights
The Class A Units will generally have no voting or management rights except as required by Section ___ of the Operating Agreement of the Company by and among the members thereto (the “Operating Agreement”).
Subscription by “Exchange”
Investors may subscribe by exchanging pre-approved publicly traded securities (“Exchange Securities”) for their Class A Units, including (i) “low-basis” securities (securities with a basis to the holder below the market value of the securities at the time of subscription); and (ii) registered and unregistered securities that are subject to resale restrictions under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). See the Subscription Agreement for details. Securities submitted to the Company as Exchange Securities will be held in escrow until the closing of the Offering.
Cash Generated from Exchange Securities
It is contemplated that the Company will engage in commonly used techniques for monetization of the Exchange Securities following the closing.
Use of Proceeds
The offering proceeds (generated from the monetization of Exchange Securities) will be used as set forth below under “Preservation of Principal,” “Stock Market Component,” Cash Distribution to Satisfy Tax Obligations” and “Future Projects.
Preservation of Principal
The Company will operate under a financial structure that attempts to preserve up to 100% of the investor’s original capital contribution. The Company anticipates that the ability to return capital will be based on a portfolio of varied securities that are expected to generate income in an amount sufficient to return Investors’ capital contribution in seven to ten years from the effective date of the offering. It is the intention of management to hedge a portion of the portfolio against market fluctuations through several commonly used hedging techniques.
Stock or Stock Market Component
It is anticipated that approximately 5% to 10% of the offering proceeds (cash generated from Exchange Securities) will be used to purchase a derivative of the underlying stock contributed or the equivalent of the Standard and Poor 500 index (the “Index”). This, hopefully will provide investors with a component that allows upside participation in the underlying stock or in event the index rises in price during the period until maturity. It is anticipated that this component will produce a return of approximately 30-50% of the advance of the Index.
Cash Distribution to Satisfy Tax Obligations
The Company intends to distribute cash that can be used to cover up to 23.8% of the long-term capital gains tax due on the constructive sale of the contributed Securities.
Fees
The Company expects to incur commissions and other selling expenses of up to 3% of the offering proceeds. The Manager will receive a fee of 1% per annum of the total proceeds held by the Company. The Company will also pay the Investment Advisor for a fee of approximately ___% of assets under management per annum.
Capital Accounts
Each investor will have his or her own capital account in the Company.
Marketability of the Securities
Class A Units are restricted securities within the meaning of the Securities Act, and generally may not be transferred in the absence of registration under the Securities Act or further exemption. The transfer of the Units is further restricted by the Operating Agreement.
Risk Factors
Purchase of the Units involves certain risks that are more fully described under “Risk Factors” in the Offering Memorandum. Among these are the risk that the Company has no history of operations; the investor is dependent on the efforts of the Manager and has no right to participate in the Company’s operations; the Company may compete with other organizations which may have more resources than the Company; the Class A Units are illiquid securities; and the Company intends to engage in several sophisticated securities trading strategies which may not produce the results expected.
Investor Suitability
Purchase of the Class A Units involves significant risks and is not a suitable investment for all persons. The purchase of the Class A Units is suitable only for persons who demonstrate to the Company that they meet certain minimum standards economic means and investment experience. Subscribers generally must demonstrate to the Company that they qualify as “accredited investors” within the meaning of Rule 501(a) of Regulation D under the Securities Act.
The economic benefit of an investment in the Class A Units involves a high degree of business and financial risk. Whether a purchase of the Class A Units is suitable for any particular investor will depend on, among other things, the investor’s objectives and ability to accept risks.
Investment Advisor
A full-service nationally recognized brokerage firm will act as the Investment Advisor.
Investment Techniques
The Company’s investment strategy may include without limitation, certain investment techniques currently known and unknown. Such transactions may include the purchase or sale of stock, indices, equity options, bonds, including government Bills, Notes, and Bonds, Agency issues such as GNMA and FNMA issues, and GNMA Manufactured Home bonds, Government STRIPS, and various corporate and municipal bonds and other debt instruments including Zero Coupon bonds, High Yield bonds and Convertible bonds and Manufactured Convertible Bonds.
Such transactions may also include other financial instruments including derivative instruments, to hedge against securities price declines, and to enhance returns. Such transactions may include, without limitation, the purchase and sale of futures contracts on stock and stock indices and options thereon, the purchase of put options and the sale of call options on securities held in the portfolio, equity collars, and the purchase of call options on securities and indices. Derivative transactions may be more advantageous in each circumstance than transactions involving securities due to more favorable tax treatment, lower transaction costs or greater liquidity. By using certain derivative instruments, forward sales of stock and covered short sales rather than selling appreciated securities, the portfolio can reduce its exposure to price declines in such securities without realizing substantial capital gains under current tax law. The portfolio may engage in covered short sales and forward sales of stock held. The portfolio may also lend portfolio securities. The portfolio’s ability to utilize covered short sales and certain equity swaps, forward sales, future and collar strategies as tax efficient management techniques with respect to holding of appreciated securities may have limitations. Finally, there may be new financial instruments created by the industry that will offer significant advantages.
Acceptable Securities
Equity securities proposed for contribution to the Company will be evaluated by the Company management and investment advisor and accepted or rejected based primarily upon the Company’s view of how acceptance of such securities would affect the Company’s ability to achieve its investment objectives.
The Company will consider for acceptance only equity securities meeting each of the following criteria at the time of contribution: (a) are listed on the New York Stock Exchange (“NYSE”), the American Stock Exchange (“AMEX”), the Nasdaq National Market (“NASDAQ”), (b) have a per share trading price of at least $10.00; and (c) are issued by an issuer having a equity market capitalization of at least $500 million. Securities convertible or exchangeable into securities meeting each of the above criteria will also be considered for acceptance. The Company will not accept any contributions of securities that would cause the Company to have more than 9% of the total shares outstanding in the securities of any one issuer, or that would cause the Company to be considered an “affiliate” of the underlying company. The Company will consider for acceptance contributions of equity securities of publicly traded companies that are restricted as to disposition pursuant to contract or the Securities Act of 1933, as amended (“the Securities Act”) either by virtue of having been issued or acquired outside of a registered public offering or because the holder is an affiliate of the issuer.
Manner of Subscribing
Persons who wish to invest in the Company may do so by contributing one or more equity securities that are acceptable to the Company (“Acceptable Securities”). Unless waived or amended at the sole discretion of the Placement Agent, the minimum subscription will be $3 million of Acceptable Securities, valued for the purpose of meeting the minimum subscription as of the close of business on the date of their deposit into escrow. To subscribe to the Company, each prospective Unit Holder should deliver such prospective investor’s securities, Subscription Agreement, and other required subscription documents (together, the “Subscription Documents”) to the Placement Agent or subagent.
Escrow Arrangements Securities delivered to the Company will be held in escrow for the separate account of the person who has deposited such securities (“the Subscriber”), pending the closing of the offering. Securities that are not certificated and are held in book-entry form will be noted in the records of the custodian of such securities until the Minimum Offering is achieved.
Federal Income Tax Consequences
Generally, an Investor contributing Exchange Securities will be considered to have completed a sale of the Exchange Securities at a price equal to the fair market value of the Exchange Securities at the time of acceptance thereof by the Company. Fair market value will be determined by the closing price of the Exchange Securities on the day of acceptance by the Company. Accordingly, the Investor will recognize long-term or short-term capital gain, as the case may be, equal to the difference in the Investor’s basis in the Exchange Securities and the deemed sale price thereof. See “Federal Income Tax Consequences” in the Offering Memorandum.
Management Experience
Management has substantial experience in finance, business development, entertainment, venture investing. Complete BIOS are in the Private Placement Offering Memorandum.
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