Angel Investors, well-to-do high net worth individuals, are currently flocking to fill the gap where Venture Capitalists have departed for small and emerging bio-tech growth companies. In 2004 it is estimated that these high net worth individuals will invest close to $2 billion, up almost 100% in two years (Center of venture research, University of New Hampshire). While Venture Capitalists are preferring to fund companies whom have drugs that are close to hitting the market, Angels have stepped up to the plate and are involved in companies from Cancer Research to Brain disorders, US based and International companies as well. Two particular areas of growth for the bio-tech industry are India and China where cheap labor and excellent education/sciences is available. They are spreading their risk by investing in diversified portfolios and unlike VC’s, whom take an active role in management, Angels come with fewer strings attached and do not require the same expensive haircuts that VC’s demand. With the current dearth of the IPO market, Angels have become targeted by companies looking for smaller rounds than VC’s would not currently be willing to fund. While all venture capital especially those for emerging bio-tech growth companies require patience and strong stomachs, it also offers great opportunities.
This past quarter was highlighted by two financings in particular. In January we, through WestPark Capital, Inc. (our brokerage affiliates), closed a $500,000 Convertible Note for China Biopharmaceutical Holdings, Inc. We would like to thank Stanley Wunderlich, our Senior Advisor and Howard Jiang esq. of Baker Mackenzie LLP for bringing us the transaction and Dr. Robin Smith for spearheading the science and due diligence. In March we likewise closed a $1.5M Convertible Bridge Loan for Astrata Group, Inc. (NASDAQ symbol “ATTG”). We would like to acknowledge the efforts of Todd DeMatteo of Westminster Securities who participated with us in structuring the financing. News releases on China Biopharmaceutical Holdings, Inc., Astrata Group, Inc. and CDKnet.com closings (see below) available upon request. We would also like to welcome to WPs growing list of Corporate Consulting and/or banking clientele: Software International, Inc. (“SWII”), (Sommerset, New Jersey), Talon Air Lines (Farmingdale, New York), A Lung Technologies (Pittsburg, PA), Ad South (Boca Raton, Fl.), Sunset Brands (“SBUA”) (Needham, MA), NPG Sport (Las Vegas, Nevada), Navistar, Inc./Happy Star Media (Shanghai, China) and Amon Investments, LLC (Daytona Beach, Fl.). In addition, as of this writing, we have just completed our participation in CDKNet.com’s (“CDKN”) $650K Convertible Note and warrant private placement and are in the process of raising an additional $2M Round in the form of a Convertible Preferred for China Biopharmaceutical Holdings, Inc. to assist in financing an acquisition (materials available upon request). Finally, we welcomed an old friend, Axel Mehrle who joins us as our new Director of Investment Banking and Corporate Finance. He, Neal Scott and I go back almost 20 years to Emanuel & Co., a Wall Street based firm where we all got our start in the financial services businesses. It’s an honor and privilege to finally have him aboard.
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“The rhythm of his life was prayer”
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- George Weigel
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At 10:37PM Saturday night April 2nd, 2004, Karol Jozef Wojtyla, Vicker of Jesus Christ and head of the billion member Roman Catholic Church died at age 84. As pope he will be remembered for many things: he was the first to visit a mosque, launched a website, commerated the Holocaust at Auschwitz and visited enough new countries to actually circle the globe 31 times. He was instrumental in breaking the vice of communism in Eastern Europe and indeed to his death was never allowed to visit Russia, neighbor to his native Poland. Perhaps no figure in the 20th century inhabited his role in life so fully and completely and in so many diverse ways. The Pope was truly a citizen of the World and even in his last years, suffering from poor health his enthusiasm for prayer and his spiritual powers never abided. This author in particular will remember him in Boston in 1979, when he was in law school in that city where he greeted over 100,000 strong with, “I greet you American the beautiful”. While Perhaps no figure in the 20th century inhabited his role in life so fully and completely and in so many diverse ways the world sits and waits as 117 voting members of the College of Cardinals meet in the Sistine Chapel to choose the next Pontiff, we all recognize the tremendous accomplishments of John Paul II and as the bell tolls in St. Peters Square the world mourns his memory.
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“But if there be truth in me, it should explode. I cannot reject it; I would be rejecting myself.”
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- Karol Wojtyla, The Future Pope, 1961
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April 1st is always a special day for this author. On a professional basis, it marks the 7th year anniversary of Wellfleet Partners, Inc. I want to acknowledge our first employee, Dolores Lorenzo whom worked for me for over a decade and our first three years at Wellfleet. We wish her well. On a personal note, it would also have been the 86th birthday of my blessed father, Aaron Lew, gone these 11 years’. Many friends of Wellfleet know that the firm was named in his memory and after his company, Wellfleet Textiles. I started Wellfleet Partners, Inc. (as I did my prior two companies) on April 1st, his birthday in 1998. Our slogan “nova ex Veteris” means “The new shall be borne from the old”. Now you all know the meaning! To my friends, shareholders, investors, employees and colleagues at Wellfleet and our associates worldwide, we thank you for your friendship, support and patronage these past seven years.
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“Be nice, do your best-and most important, keep it in perspective”
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- Meg Whitman
CEO & President of eBay
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As spring arrives and March leaves us “like a lamb”, may we wish you and your families renewed hope, continued success and a safe return for our brave and courageous troops abroad.
Note: This report was produced by Wellfleet Partners, Inc. (“WPs”) from various public research sources, for the sole purpose of general information. WP makes no warranties to its factual content and is not a brokerage firm, registered Investment Advisor nor securities dealer; therefore, nothing contained in this report shall constitute an offer to sell, solicit or buy any securities or investment advice. Investment in these securities mentioned here involves risk and should not be considered without first reading the target Company’s most recent financial statements, 10Q and 10K, its Private Placement, Offering Memorandum or Business Plan, if applicable, and discussing the investment with your registered representative or professional financial advisor. Venture capital and investment in the market is inherently extremely risky. Mr. Lev, the author of this newsletter as well as other members of WPs and SR, are registered representatives of WestPark Capital, Inc. and NASD member broker-dealer principally headquartered in Los Angeles, California.
