Aventura Equities Inc (AVNE): WNSH as a Holding Company… Last...

Reply Private New

Replies (11) Next 10 Prev Next

Send PM Follow Ignore

Followers	5215
Posts	24018
Boards Moderated	5
Alias Born	09/20/2000

stervc

Re: None

Tuesday, 07/10/2007 2:21:26 AM

Tuesday, July 10, 2007 2:21:26 AM

WNSH as a Holding Company…

Last week I called Martin Allen Brown at Zhemian Ventures. Martin is the Founder of Zhemian Ventures. I didn’t ask, but I think he is the CEO of Zhemian Ventures too. Today he returned my phone calls. He stated that he has been in contact with Franco, the new CEO of WNSH. He explained to me his role and many things that were very new to me for understanding so please have some patience in reading and understanding how I tried to simply explain things.

Martin is also a Securities Lawyer too that specializes in many things to include SEC/NASD compliance. He has been appointed by Mayor Kathy Taylor of Tulsa as a member of the City of Tulsa’s Economic Development Commission. Martin also specializes in the net income (NI) approach vs. net operating income (NOI) approach to capital structuring. Martin was the recipient of the TU Law Alumni Association’s Outstanding Committee Chair award in 2004 and Outstanding Alumnus in 2005. Ok, I’m convinced that this guy knows what he is doing and is probably cautious about his involvements to make sure his reputation is not tarnished.

He can be reached at the info below within the website which is also in the Ibox:
http://zhemian.com/
Zhemian Ventures, L.L.C.
6128 E. 38th Street
Suite 312
Tulsa, Oklahoma 74135
(918) 280-4559 (Phone)
(918) 280-4548 (Facsimile)

Martin explained to me that Zhemian Ventures is responsible for getting Appletreecapital’s clients. All of Appletreecapital’s clients are highly established Institutions as he informed me. These Institutions are already proven that they deal with in raising capital. They go to these Institutions to get a certain amount of capital because they show these Institutions how they can guarantee them a return in the area of 25% or so through a group of already proven and existing profitable private companies with proven business plans currently existing. Martin told me that they only deal with profitable companies.

I informed him that when investors hear of raising $125 million in capital within the penny stock world, we have a tendency to think of the capital being raised through the company selling/dumping shares into the market. He told me “not here.” They get their capital from Institutions that wants to give them capital to invest because of their proven track record and guarantee they give them in returns over the next one to two years.

After a year or two, they give the Institutions the opportunity to cash in on their 25% gain. I know that 25% does not seem like much to us here in the penny stock world, but to the Institutions, they only care about small gains like such over an extended period of time because of the large amount of dollars invested. These investments are definitely less volatile. Although Appletreecapital is not a mutual fund, a better way to see them is to see them as a company that acts as a mutual fund for the Institutional Investors just the same as a regular mutual fund acts for us retail investors.

Martin explained to me how Appletreecapital would generate Revenues. Appletreecapital (now WNSH) would make their money from what he called “The Carry” and “Management Fees”

** “The Management Fee” is the 2% through 7% return on the deal closed and matured with the Institution.

** “The Carry” is the amount that is left over after Appletreecapital pays out the promised 25% to the Institution. Usually this amount is more than what was paid out to the Institution and is what is paid back to the Appletreecapital and its shareholders. This is usually the bulk of the return.

Appletreecapital merging into WNSH will already be profitable and already have a list of confirmed Institutional clientele support. He could not tell me the amount, but I did get out of him that they are nearly completed in raising the $125 million through the Institutions. Now, with this $125 million, at first I didn’t understand something about the use of that money. My thoughts were… “Why couldn’t they use the $125 million raised to buy back shares?” The reason was because the $125 million is raised capital that was given to them by the Institutions to invest in the promised profitable private companies that were already reviewed. The money used to buyback shares would come from other areas as he mentioned to include money made from “The Carry” and “Management Fees.”

Again, Martin told me that the Management Fee is the 2% through 7% return on the deal closed and matured with the Institution. Let’s consider on a low side a Management Fee of 2% of this $125 million deal.

This means that Appletreecapital would get the 2% Management Fee below:

$125,000,000 x .02 (2%) = $2,500,000

Martin told me that “The Carry” is usually an amount that is equivalent to or greater than the amount paid out to the Institutions or more. Martin told me that this is the amount that is paid back to Appletreecapital and its shareholders. This is usually the bulk of the return. I see why too. Let’s say that they have a bad year and could not give the Institutions the promised 25% return on their money, but instead only 15% return on their money. This would mean that as a minimum, Appletreecapital would get as a minimum, 15% of that $125 million as “The Carry” which means:

$125,000,000 x .15 (15%) = $18,750,000

The total amount that Appletreecapital would walk away from with this deal to include both the “Management Fees” and “The Carry” would be:

$2,500,000 + $18,750,000 = $21,250,000

Since the overhead from running this kind of business is very minimal, I think it would be fair to affix a quarter of the $21,250,000 in Revenues to be attributable towards paying the Expenses. To consider this situation, this would be as such below:

$21,250,000 – ($21,250,000 ÷ 4) = Income
$21,250,000 – ($5,312,500) = $15,937,500

The $15.9 million would be cleared as profit as the Expenses for WNSH would be more than taken out from Revenues generated. Even with an OS of 4 billion shares as a worse case scenario, consider below:

$15,937,500 ÷ 4,000,000,000 shares = Earnings Per Share (EPS)
$15,937,500 ÷ 4,000,000,000 shares = 0.00398 (EPS)

Using a Conservative P/E Ratio of 12 x .00398 = .047 per share

This means that in only including the current $125 million deal and not any future deals, WNSH could logically and fundamentally be worth .047 per share if they only make 2% in Management Fees and 15% as “The Carry” if they were only able to give the Institution a 15% return on their money from this deal.

I told Martin that this is a rather complicated business model for an average investor like me and many others. I asked him if I could share our discussions within some investor forums to help them understand what is going on and he said that such was fine.

The information that I have posted in the past and now is information gathered from doing my own DD. It appears that WNSH is still in the preliminary stages of a major transformation. It will be up to the new management to begin officially informing WNSH shareholders of their new direction for being a holding company. I do see some potential in WNSH given its new business model and direction. I think everyone should always be cautious of any investment enough to not solely believe what anyone is saying or post. So please do your own DD to determine if WNSH is worth you taking the risk. I hope this helps.

v/r
Sterling

Sterling's Trading & Investing Strategies:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29867262