Jan 24th, 13:08 system announcement
by Bogart Beck
ETF Formation Shareholder Vote Announcement - 01/24/2009
ETF Formation Shareholder Vote Announcement - 01/24/2009To whom it may concern;
As previously announced, SL CapEx Mgmt. has placed JTIC into receivership, and has proposed formation of an Exchange Traded Fund (ETF) comprised of the Assets of BTX and certain additional assets of SLCX. It is appropriate for the BOD's of SLCX and BTX to solicit a shareholder vote of approval for such transaction.
To encourage wide participation we have elected to facilitate voting via write-in ballot using the existing SL CapEx Forums. Voting will remain open from noon pacific (SLT) today, Sunday January 24, 2010 through noon pacific (SLT) next Sunday January 31, 2010, at which time all votes will be tabulated
(1 share = 1 vote) and a definitive decision rendered.
A vote of YES shall be tabulated as IN FAVOR of the SLCX proposal.
A vote of NO shall be tabulated as NOT in favor of the SLCX proposal.
Please note; shares abstaining from voting will not be tabulated.
Ballots for BTX shall be posted at http://www.slcapex.com/forums/topic/BTX/2829
Ballots for SLCX shall be posted @ http://www.slcapex.com/forums/topic/CAPX/2830
A simple post defining the number of shares you own followed by a YES or NO will be sufficient, eg; BTX 300 shares NO
SL CapEx mgmt will review the authenticity of each ballot cast at tabulation.
We will allow both BTX and SLCX to trade freely during the ballotting period. The HALT for each will be lifted momentarily. JTIC shall remain halted.
Best wishes,
Bo
===============================================================================
SL CapEx places JTIC into Receivership – 01/15/2010
BTX, CAPX and JTIC have been halted immediately prior to the posting of this proposal to allow for wide distribution of this material, previously non-public information. Each shall remain halted for an indeterminate period to allow for discussion and non-inflammatory debate regarding the merits of this proposal. We hope this proposal finds favor with all of the constituencies involved and look forward to some lively discussion regarding its viability.
Please post any comments or questions you have regarding this publication in the following SL CAPEX FORUM ONLY.
http://www.slcapex.com/forums/topic/JTIC/2823
=============================================
To whom it may concern;
Almost a year ago the SL CapEx BOD made the difficult decision to seize control of Arbitrage Wise's SLW and WPM enterprises. While certainly an unpopular action for some, in the end it would appear we made the right decision. At that time, Arbitrage made specific commitments regarding his obligations, including a pledge to buy back 100% of the outstanding JTIC shares by year-end 2009. Clearly, that has not occurred in any measurable manner, and, ongoing recent dialogue between Arbitrage and the SL CapEx BOD has lead us to believe that he is no closer to settling those obligations than we were a year ago. As such, the time has come, once again, for SL CapEx to intervene on behalf of the JTIC investors. While a case could perhaps be made to allow JTIC to continue to trade indefinitely, we have arrived at the conclusion that many have suggested is long overdue - it's time to close this chapter, turn the page and move on.
So... now what? As with most of the messes we've been left to clean up, this one will be no easier than any of the others. As of 01/15/2009, EXCLUDING Arbitrage's JTIC holdings, 123 persons held the remaining 4,587,279 JTIC shares. At $0.60 per share, (JTIC's closing price Average over the last 30 days), that represents just over L$2.75M in Market Capitalization secured by virtually ZERO tangible assets and no foreseeable positive outlook.
Dare I say that's more financial risk than even Scott and I are willing to digest independently.
Over the last week or so we've looked at a variety of options and possibilities - none would likely provide much satisfaction for JTIC investors. Coincidentally, during that same time frame Andy Grant has been socializing an IPO concept (RA) that he's developed over on ISE, (See http://www.intlstockexchange.com/punbb/viewpoll.php?id=1409 ). While Andy and I sometimes disagree on policy issues and implementation, and technical trading strategies, in this case I think he may be on to something that could help fundamentally reshape the SL Investment landscape, and, may also help us provide a solution for the JTIC situation.
Andy's basic structure is a weighted, actively managed ETF with a corresponding inverse derivative as a stop-loss hedge. While Exchange Traded Funds are nothing new (it all comes down to the trading performance of the Fund Manager and the portfolio), what I do find compelling about Andy's concept is that the derivative product appears to be the very first in SL Finance that cannot be arbitrarily priced by the issuer or underwriter. If that's accurate then it's potentially a profoundly positive game changer.
I think Andy’s hypothesis assumes that the quantifiable risk of an Inverse derivative is directly proportional to the volatility and liquidity of the opposing asset portfolio. Thus broad diversity of the asset portfolio is fundamental to the risk mitigation strategy.
My concern for Andy's product at this point is the relatively small scale of the underlying ETF portfolio, which, while diverse, is at present somewhere in the neighborhood of just L$50K + cash, less the inverse derivative's liability. I think the small scale may be intentional - a "pilot" project to test the hypothesis – if that’s the case I wish Andy and the shareholders good fortune.
That brings us to the launch point for discussion regarding JTIC and the disposition of its investors. As I’ve mentioned, Scott and I are not prepared to independently bail out the JTIC investors – it is just far too expensive with no near term upside opportunity. We can, however, offer assistance by leveraging our existing pool of assets in a manner that builds a foundation for future growth and concurrently provides the potential to hedge against further losses. We’ll ultimately test Andy’s hypothesis on a larger scale.
In a nutshell, here’s what we’re proposing;
1. SL CapEx would form a NEW Exchange Traded Fund as a subsidiary of SL CapEx, however with its own tracking Stock.
2. SL CapEx then places its “Long Term Investment Portfolio” (current NAV of approx. L$1.9M) in an ETF Trust Account.
3. The ETF then acquires all remaining shares of JTIC (excepting Arbitrage Wise’ shares) at a predetermined Exchange Rate.
4. The ETF also acquires BTX to secure its asset portfolio (current NAV of approx.L$2.8M) w/ ETF as sole surviving entity.
5. SL CapEx would appoint Bogart Beck as the Fund’s Portfolio Manager and ETF Trust Administrator.
6. SL CapEx to allow a brief (indeterminate) timeframe to normalize ETF’s trading range and assess its portfolio volatility…
7. … ETF to launch an Inverse Derivative product using a methodology similar to that of RA and Andy Grant’s hypothesis.
Please find below a brief synopsis of the ETF Launch Capitalization structure required to account for the current Market Cap of JTIC and BTX which both historically trade at a substantial premium to their Net Asset Value.
1. Formation of ETF with 8M Authorized shares at L$1.20 per share for a total Market Cap of L$9.6M
2. Acquisition of JTIC with a merger Exchange Rate of 0.5:1 (0.5 ETF Shares for each 1 share of JTIC) Evaluates JTIC at L$0.60 per share - its 30 day closing average.
3. Acquisition of BTX with a merger Exchange Rate of 2.5:1 (2.5 ETF Shares for each 1 share of BTX) Evaluates BTX at L$3.00 per share - discounted but close to its 30 day closing average.
4. The initial NAV of ETF held securities would be approx. $4.8M ... not too bad (50% of its Market Capitalization).
BTX, CAPX and JTIC have been halted immediately prior to the posting of this proposal to allow for wide distribution of this material, previously non-public information. Each shall remain halted for an indeterminate period to allow for discussion and non-inflammatory debate regarding the merits of this proposal. We hope this proposal finds favor with all of the constituencies involved and look forward to some lively discussion regarding its viability
Please post any comments or questions you have regarding this publication in the following SL CAPEX FORUM ONLY.
http://www.slcapex.com/forums/topic/JTIC/2823
The management of SL Cap Ex will review and respond to each comment or question as appropriate and time permits.
Respectfully,
The SL Cap Ex BOD