Global Crossroads Capital

December 13, 2007

Internet Brands, Inc. recently acquired a Las Vegas-based real estate
finance broker forum. This on line forum features a discussion string
about the list of legitimate commercial lending and hard money investor
fees. The list includes appraisal, environmental, geologic, title
search, site inspection, and legal opinion or due diligence. The
discussion host states the obvious; no lender will pay client expenses.
The exception is, perhaps some fees can be wrapped into the loan
package. Maybe.

Those seeking capital believe they can skip fees by pursuing private
investors. However, raising capital beyond a Founders Round of friends
and family requires either private or public placement memorandum. Both
PPM’s/PPO’s have mandatory state and federal registration fees. For
further details, see our prior report called “All PPM’s Must be
Registered With the State They are HQ’ed”. One exception is the M-1
form indicated under the Keywords centered on our homepage. But this is
available only in 1 state.

Investment banks can cost $100K to implement PPM’s/PPO’s and still take
at least 6 months. A State Senator is also a VP for a Nevada investment
bank that does accept partial equity in exchange for fees and arranges
contract financing to defer the difference. But this appears to be the
exception rather the norm nationwide.

There are those who prefer to attract angel investors in hopes of being
exempt from any expenditures. Angel investors tend to mitigate their
risk by collocating their capital as part of a group. And these groups
often require a presentation fee typically ranging from $100 to $1000.
To see the profit return expectations, cap limits, demographic, industry
and other limitations of angel investors; see both of our 2 prior
reports called “Merits of Asset-based Funding over Equity Capital” and
“Why Not to Blame Investors; the Difference between Enquirers & Clients”.

Collateralized enhancement financial instruments like stand-by letters
of credit or bank guarantees leverage capital for developers of large
commercial real estate and infrastructural projects. But these
instruments are not free and do require an acquisition or escrow cost
from 2% of face value ranging to $100M. Acquisition of pink sheets or
reverse merger shells can also easily cost over $200K.

Investor relations media communication firms found nationwide also have
legitimate fees such as; monthly administrative fees, multi-media
advertising budgets, preferred stock acquisition, sliding scale
commissions of funds raised, and/or subscriber fees. Just like the
comparison service provided by Progressive Auto Insurance; see our prior
report called “IR Media Communications Industry Cost Comparison”.

www.GlobalCrossroadsCapital.com offers at least 2 options for raising
significant amounts of capital without any out of pocket expenses.
These options found on our Trade Show Floor are Bartered Equity to $5M
and asset-based non-recourse 90% LTV Hedge Funds with no cap limit.
“Where Capital Trade Show meets Palm Treo” sums up our user-friendly
free access trade show formatted-push button accessed finance portal.

PREVIOUS: Part 4…Lehman Formula

Best regards,

Jeffrey D. Allen
C.E.O.

(702) 369-2621 9am-5pm PST

www.GlobalCrossroadsCapital.com

August 29, 2007

Dear Prospective Client,

No known broker-dealer or investor relations media firm pays to represent clients by incurring their offering campaign expenditures.

Examples of diversified fee structures by a few of our competitors are disclosed at the bottom of PT. 1 of this e-brochure and reported at “IR Media Communications Industry Cost Comparison” archived 18 Jun 07 on the finance link for www.emailwire.com.

Prospective clients who wish to OPT-out of IR Media related costs are encouraged to use our SELF-serve trade show floor formatted-push button accessed finance portal.

Prospective clients who have complex funding requests NOT already sourced in our finance portal are encouraged to continue reading…

The previously mentioned multi-media broadcasting tools discussed in : “Platforms for IR Commo”, and their related costs are on a case-by case need basis and are entirely OPTIONAL to the potential client.

The following success commission fee structure is relative to most other services provided by ALLEN & Associates. The rates are in percentage to; (a) raising of capital, (b) valuation of procured financial instruments, (c) valuation of business asset acquisitions, or (d) cost containment analysis.

Agreements are to be composed by client on requesting clients company stationary, and then mailed to me. POB’s are not an acceptable address for businesses. If other than a sole proprietorship, the agreement must be countersigned by 2 client corporate senior executives/principals. Brokers of principals do not count; unless principal client authorizes in writing for 3rd party broker to pay me in full when I’m done.

ALL supporting due diligence documents used to attract investors, to include copies of collateral MUST accompany commission fee agreement PRIOR to ANY introductions. NO exceptions. (This redundant issue is repeated in My Standard Operating Procedure)

Client understands that that commissioning me to BEGIN is an irrevocable right to FINISH when capital is secured and terms are mutually agreed with provider.

If the funding is entertainment industry related, then credit and copy is also required when applicable.

Fees are required at close of escrow, per round secured, and can be agreed to paid (a) directly from investor/lender, (b) by bank wire transfer, or (c) by bank check within 5 calender days via postal mail. Agreement must specify which of the aforementioned terms are agreed to.

Lehman Formula structure as follows;

UP to $100,000 is 6%

UP to $250,000 is 5%

UP to $500,000 is 4%

UP to $750,000 is 3%

UP to $1,000,000 is 2.5%

UP to $2,500,000 is 2%

OVER $2,500,000 is 1.5%

OVER $20,000,000 is 1%

For clients sending contract packets or making fee payments today, may request postal address to send to.

PREVIOUS: Part 3…Equity Report
NEXT: Part 5…Myth of Advance Fees

Best regards,

Jeffrey D. Allen
C.E.O.

(702) 369-2621 9am-5pm PST

www.GlobalCrossroadsCapital.com

August 29, 2007

Dear Prospective Client,

“Equity Capital Approvals Continue to Decline”

As documented by BOTH the Larta Institute and National Venture Capital Association (NVCA); venture capital and private equity, over the course of the last 4 years, continue to be on the decline (as of 11/04).

The overwhelming majority that is issued (estimated $51B between 1-5/05) has priority to expansionary (3+ years) stage companies (usually with revenues over $5M); NOT companies with no revenues track record or any form of collateral.

As of 1/05; Barry Moltz published an article on the “Six Biggest Entreprenurial Mistakes” in www.youngmoney.com. First on the list was “Depending on building a business though funding from an angel or VC”. He further stated that the chances of success doing so range from 0.5 to 4%. Barry Moltz is the co-founder of the angel investor group www.praireangels.org.

Only 2.9% of the US population qualifies as ‘accredited private investors’. Of this percentage, the majority of these investors have 3 industry focus sectors of ; real estate, technology, & energy. Buying ‘accredited investor’ cold-calling lists and the related cost of operating call centers, has even a less success average of 1 to 2%.

Of the business plans competing for investors interest; only 5% are actually read. The investment community rates 84% of business plans as average or poor. And angel investors reject 97% of plans.

All of the above are some of the reasons why only 1 in 200 funding proposal submissions to P/E or V/C investors result in approval. Kind of like “throwing mud against the wall”, in hopes that it sticks.

PO Funding is not debt financing; it is asset-based funding. Once a company is approved for PO or simular funding; it is better than equity capital, since you do not have to pay it back. Also, approval is not based on your firms credit rating; but rather, that of the signatory firm on the purchase order or distribution agreement. ‘Balance Sheet Collateral Enhancement’ financing is also an attractive alternative for early-stage companies.

Also be reminded that the V/C or P/E acquisition prorated costs are between 25% to 70% of earnings OR a average range of 3x to 10x of their investment principal after a term of 5 years. And V/C or P/E almost always seek hands-on management (majority) control in addition to high ROI. (You might as well be an employee)

In the Spring of 2005; 7-year old Las Vegas-based employee-surveillance company ‘Smart Connect’, had a private investor require a return of 30x his investment of only $100,000.

Equity V/C’s also get preferred stock with a deferred dividend or ‘guaranteed return’ (of at least 3x ROI) should the company be sold. Also, the preferred stock can be ‘participating’; which means it is ALSO entitled to a percentage of remaining proceeds based on ownership.

Proceeds are based on valuations. And valuations on a company if it goes public are much higher. Example: A deferred AND participating equity investment of $3M to a company; that later goes public and then sold for $100M, could owe the investor $39M.

Now which is cheaper?

Then there is the due diligence timeline issue. For equity investments, the average range is 2-6 months for approval and close of escrow. For asset-based funding, a LOI can be issued in 72 hours and close of escrow achieved in about 2 weeks.

Then there are those who equate equity capital as being expendable risk capital. For those who think they don’t owe investors any money should the business negligently or fraudulently fail…need to read the provisions outlined in the US Sarbanes-Oxley act of 2002.

On the flip side, companies can attract investors by acquiring FDIC-insured insurance guarantees; designed to protect the investors principal in the event the companies fail for whatever reason. (This is of particular benefit to film investors)

Access to angel tech investors, government interest-free debt capital, corporate sponsorships, institutional equity, asset-based capital, foundation grants, export working capital, financial instruments, and technology transfer partnerships are some of my finance options providing a consistant approval range of 30% to 75%.

PREVIOUS: Part 2…My SOP

NEXT: Part 4…Fee Terms

Best regards,

Jeffrey D. Allen
C.E.O.

(702) 369-2621 9am-5pm PST

www.GlobalCrossroadsCapital.com

August 29, 2007

Dear Prospective Client,

The purpose of the funding options list provided per request; is to help companies seeking debt/equity capital identify possible financing structures, combined with matching clients goals with capital providers approval criteria.

Preparation prior to contracting me; include having a business plan, financial statements, proof of funds, (for leveraging LTV’s or to acquire instruments), proof of collateral/current earnings, or letters of intent.

These supportive documents are not limited to; purchase orders, real estate appraisals, IP patents or copyrights, distribution or advance royalty agreements, letters/lines of credits, certificates of deposits, T-bills, and bank or insurance guarantees.

For those who indicate they have a private placement memorandum; it must be registered with their state and proof of this is to be provided.

Prior to sending the above to investor, the above can be sent to me for evaluation, in a 1 page non-attachment text summation. If the presentation is not clear in one page; sending a 50 page attachment will usually result in VC’s chucking it in the trash (The average acceptable business plan is 25 pages).

EVERY single investor will ask “What do you have invested in the project?” The other major question they always ask is “What is your exit strategy & related timeline to do so?”

If you have few or none of all of the above, then you are in the concept stage. I do not do that. I also do not deal with projects that have already been farmed out all over or are part of a daisy-chain of brokers. The funding success rate of these are nearly non-existant. I also do not pay client expenses to acquire tired so-called ‘accredited private investor’ cold-calling lists.

My PRIORITY of arranging financing is in the descending order;

(1) Asset-based Lending, (2) Collaterized Note Enhancement Finance, (3) Stated Asset Commercial Mortgages (4) Exchange Traded Funds (1031’s),(5) M&A’s Corporate Finance, (6)Sponsorship & Subsidies, (7) Angel/Institutional/Bartered Equity, (8) Reverse Merger Shells, and (9) Municipal Finance.

I do not work without countersigned contract signed and sent to me by 2 principals from firm prior to beginning ANY work.

PREVIOUS: Part 1…Multi-media Platforms

NEXT: Part 3…Equity Report

Best regards,

Jeffrey D. Allen
C.E.O.

(702) 369-2621 9am-5pm PST

www.GlobalCrossroadsCapital.com

August 29, 2007

Dear Prospective Client,

Today, intermediaries are indispensable for the finance, P/E, and M&A’s industry. More and more lenders and investors alike may review proposals only after preparatory research has been done by the intermediary.

Sellers of businesses issue their full disclosure following introduction of validated buyers by intermediary. And more often, private investors review proposals as part of an angel investor group that relies on the preparatory due diligence provided by intermediaries.

ALLEN & Associates, as recognized by the I.R.S., is a financial communications & PR firm, that effectively utilizes a variety of multi-media platforms to communicate worldwide.

BROADCAST CAMPAIGN OPTIONS:

Clients have individual strategic messaging campaigns to select from; iPodcasting, webblogging, webscreencasting, satellite radio, VOiP, branded/permission emails, RSS news feeds, and broadband VC-TV (as reported in The Washington Post and shown at NAB ‘05)

A ‘Virtual Dealroom’ is also to be implemented, per option; that will speed transactions, cast a wider network, and manage risk analysis. Interactive software communication platforms to achieve this include (IRM) investor relationship management and (AMS) acquisition management software programs.

ALLEN & Associates is also available to host/promote angel investor conferences in Las Vegas. Las Vegas is the #1 convention destination in the US and already hosts annual investment shows like ‘The Money Show’ and ‘Gold Conference’.

ALLEN & Associates media organization affiliations currently includes membership with I.A.T.S.E. (Founded 1893). Other affiliations being considered include E.R.M.A., N.A.T.P.E., among others.

COMPETITOR COMPARISON:

Fee structure comparison of industry competitors like Equicom Group routinely require; $4,500 per month upfront retainer, preferred stock options of client firm, and 8% commission of capital raised.

Another comparison shows that in the Summer of 2005; Stockwire Research Group charged SLS Audio $194,000 for its multi-media advertising campaign, plus acquired 97,000 shares.

In contrast, ALLEN & Associates has; (a) NO mandatory stock options requirement, (b) NO retainer fee for initial basic consulting services, (c) optional fees per individual multimedia campaigns, and (d) commission fees are on a sliding scale basis of a minimum of 25% less.

The success rate for approval of funding from capital providers relies predominately in the relationship between the capital provider and the client seeking funds. This relationship is pursuant to the cooperation of clients ability and willingness to undergo the due diligence approval criteria of any given capital provider.

With this in mind, ALLEN & Associates is selectively seeking eligible business assets seeking buyers, businesses seeking debt/equity capital, as well as capital providers seeking projects.

NEXT: Part 2…MY SOP

Best regards,

Jeffrey D. Allen
C.E.O.

(702) 369-2621 9am-5pm PST

www.GlobalCrossroadsCapital.com