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Advanced RE Investments (AREI), has obtained rights to a new investment opportunity for accredited investors and presents to you a one-time, pre-PPM stock offering for investment with a new insurance platform for Investment Insurance. Financial Investors Insurance Corporation, referred to as “FIIC”, offers an innovative parallel to FDIC and a very new and distinct way to think about one’s investments.
The Company has been formed for the purpose of providing the opportunity to invest through AREI, a Wyoming limited liability company, and directly purchase stock with FIIC, Inc. at an exclusive, and limited-time entry price that is otherwise not available at this investment premium. FIIC is a project many years in the making and intends to offer Insurance Policies protecting the principal for a Private Investment as a new solution to investment loses, something not existent in today’s marketplace. Think Life Insurance for Business Funding, where money is insured similar to how the FDIC insures your bank account.
AREI’s ownership is in FIIC that will issue policies to protect & cover entire investments or loan proceeds in a business transaction, whether in an existing company or in an early stage company. If the deal one is invested in fails to perform, or the business stops operating or goes out of business for any reason, the beneficiary would redeem their principal. According to market industry sources including Thomas Registry, Dunn & Bradstreet and The Insurance Industry Association, the overall potential for small to medium size new business insurance premiums will reach a projected $2 trillion dollars by the end of 2019. And with continuous money moving through Private Investments on an increased basis, the targeted client base would have high potential.
FIIC will be the carrier that insures the full amount of an investor’s equity and/or debt investment made in companies that meet a strict evaluation process. (See sample application)
FIIC uses and has developed a proprietary database of Standard Industrial Classification (SIC) and North American Industry Classification System (NAICS) code companies; covering the period from 1929 through today. This unique database produces an electronic actuarial model that identifies the critical success and failure outcomes for most U.S. business industries.
Think about the introduction of FDIC when it first began in 1933. The goal was to rebuild the confidence in the problem bank market and change the mindset of individuals scared by the system during the Great Depression. Parting with their “mattress money” weighted heavy on most minds, naturally afraid of potential losses in the further. The Solution was to create market protection/Insurance on a percentage of the deposits and show security to individuals and families to build confidence in the banking system.
After the Crash of 2008 - the Great Recession, once again, we need to rebuild confidence in the system. Diversifying and insuring risk of ownership brings confidence to allow entrepreneurs and markets to move forward. We have a new market confidence problem for small capital transactions and way too many deals to review. FIIC offers a solution and will carry this confidence forward!
FIIC envisions an IPO strategy within 18-24 months. Sale of the property or shares will then fall to the shareholder’s discretion. Projections are a 3:1 multiple within 6 months and a 6:1 multiple within 12-18 months. Once the ability to start writing policy is initiated, share prices should start to see growth. Rapid growth is expected to continue. FIIC is new company in a new space for the insurance industry and should offer the advantage of writing policy exclusively or with limited competition for a period of at least 2-3 years. Claims will also be limited within the first 2-3 years due to the average business and venture failure rates.
The offering materials to be reviewed and considered by investors with respect to this offering include the information described in the website content relating to this offering (as amended and supplemented through and until the closing of the full transaction) and the subscription agreement relating to such securities (see the "Documents" tab). We refer to all of this information collectively as the "Project Information Packet". Investors should review the Project Information Packet in its entirety before investing and should consult with appropriate legal, tax, and investment advisers. Please note that RealtyeVest, AREI or FIIC are not serving as your fiduciary or adviser with respect to this opportunity.
AREI has entered into agreement for the purchase of 9.9% in FIIC through a bulk sale agreement. AREI is offering participation in these shares on par with each share purchased of FIIC Common Stock, on a One for One (1:1) relationship. Any sale of the FIIC stock must be through AREI, LLC and paid to AREI directly. No commissions will be paid out of the proceeds of this sale. All investor funds committed will be passed through to ownership of the shares.
This is a private program, not a government run program. That means that there may be future competition, instead of a government-run monopoly and there should be big profits, particularly for those who get in early, thanks to the miracle of leverage. By law, Insurance Companies are allowed to write up to $3 dollars of insurance premiums/revenue for each dollar of stated capital. With $100 million in acceptable capital on the books, the Company could write up to $300 million in premium revenue. This combined with reinsurance could insure over $2 billion in risk. This product will benefit every financial adviser as well as provide services unavailable until recently to their clients.
The offering materials to be reviewed and considered by investors with respect to this offering include the information described in the website content relating to this offering (as amended and supplemented through and until the closing of the transaction) and the subscription agreement relating to such securities (see the "Documents" tab). We refer to all of this information collectively as the "Property Information Package". Investors should review the Property Information Package in its entirety before investing and should consult with appropriate legal, tax, and investment advisors. Please note that RealtyeVest is not serving as your fiduciary or advisor with respect to this opportunity.
Below are certain risks associated with this investment that should be carefully reviewed prior to any investment in this opportunity:
Forward-Looking Statements: Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated,” “projected,” “forecasted,” “estimated,” “prospective,” “believes,” “expects,” "plans,” “future,” “intends,” “should,” “can,” “could,” “might,” “potential,” “continue,” “may,” “will,” and similar expressions to identify these forward-looking statements. Similarly, the financial forecasts contained herein and in any other offering materials are based on numerous assumptions. Although these assumptions are believed to be reasonable, they are all subject to uncertainty. Non-Transferability of Notes: The transferability of the Company's Notes is restricted both by the subscription agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer the Notes. There is also no public market for the Notes and none is expected to be available in the future. Moreover, although there is a defined redemption date for the preferred equity investment in the Fund, an extension option may be exercised and in any event, there can be no assurance that the investment will be liquidated at or promptly after such maturity date (as it may be extended). Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.
Real Estate Market Risk: Investments related to real estate are subject to market valuation risks that may be caused by changing economic and local market conditions such as local real estate market conditions, prevailing interest rates, the rate of unemployment, the level of consumer confidence, the value of the U.S. dollar, energy prices, changes in consumer spending, the number of personal bankruptcies, disruptions in the credit markets and other factors. Such conditions are beyond the control of the Company and of the Fund. Real estate markets are affected by many factors, such as general economic conditions, supply and demand for real estate investments, interest rates, the availability of financing, and other factors, all of which are beyond the control of both the Company and the Fund.
Borrower Credit Risk: The Company’s obligation to make payments on a Note will not be guaranteed for the length of the term corresponding to the borrower’s loan. The Company (and thus investors) will be relying on the borrower for the execution of its business plan in a way that enables the sponsor to repay the principal of the corresponding borrower loan. The borrower may not have a significant record of performance and may be unable to sell or refinance the underlying property in a way that enables the borrower to fulfill its obligations under the corresponding borrower loan. The borrower loan is being made with respect to a property that does not generally meet the financing criteria for conventional mortgages from institutional sources. Credit risk is inherent in the mortgage lending industry, and there can be no assurance that the creditworthiness of the borrower will be sufficient to assure the full repayment of the underlying borrower loan. The Company does not guarantee payment of the Notes or the corresponding borrower loan, and the Notes are not obligations of our borrower.
Founder, Chairman & CEO: Over 35 years’ experience leading private and public companies in the technology, insurance and corporate finance sectors. Prior experience includes, Digiboard International Corp., Scriptel Holding, Inc., that created POS signature capture CC machines used everyday, Greater Ohio Securities, Inc., Massachusetts Mutual and Penn Mutual Insurance Company.
CFO: A licensed CPA for over 30 years and professional experience includes positions with Coopers and Lybrand (now Price Water House Coopers) and real estate property management.
VP of Marketing: A seasoned veteran who served as President/CEO/Director of 10 companies in his 32 years of business experience. Responsible for having Managed, Marketed and funded a variety of companies. He was directly 3 responsible for having raised over $100 million dollars in financing for these companies as well as other business ventures. He has taken several companies public while running and managing the day to day operations.
CTO: A 20-year career as an Investment Banker who primarily focused on small businesses. Prior to joining the Company, he served as Chief Executive Officer for an Investment firm where his expertise included specializing in asset management, distribution, training and business statistics.
Nancy Smith, Managing Partner
Software & Tech Background (IBM); Multi-Family Owner/Investor
Michael Kenyon, Managing Partner
Insurance Background (ADP & PWC); Property Management Owner/Operator and Multi-Family Owner/Investor
Alice Cummings: Managing Partner
Mortgage Sales (Wells) & Corporate Manufacturing background; Multi-Family Owner/Investor
Q. How do investors realize a return on their investment?
An investment made with FIIC would be through a common-stock purchase with the investors exit planned [ideally] for post-IPO. That time frame is ultimately unknown, but with AON's backing and partnership, on plan for 24-36 months out. AREI is offering a discounted entry-rate for with FIIC stock participation pre-PPM, $0.50 for a limited time, and offered via AREI’s bulk-sale agreement. The PPM price for FIIC is listed at $1.00 per share - which would automatically give an investor a 100% increase. The projections for stock increases will follow the business plan for FIIC - ideally an increase to $1.50 per share in the first 6 months with the ability to write policy; a lift to $3.00 per share within 12 months based on additional seed funding from AON to increase policy writing; and from there, projections of $7.50 per share or greater with 18-24 months in Operation.
This is a conservative evaluation as typical insurance multiple are 17X in first 2 years due to limited claim status. Any investor would be required to hold their shares for 6 months at minimum and could sell their shares anytime thereafter - either back to the company at the PPM price (pre-IPO), post IPO at the market entry price, or hold as investor sees fit. The reason we are asking for outside investors is because AON and
FIIC are not able to write policy against their own internal funding. So, third party funding will kick this off, and AON’s funding will kick in thereafter to carry the growth.
Q. How is it possible to manage the industry risk?
AON Risk Management is the anchor. Big data is the rope. And the digital age had to come along. AON is partnered with FIIC to bring the reinsurance component to the table. AON hosts the largest risk assurance pool in the world, they have offices in 120 countries and they are well equipped with Captive and Risk Insurance Management Teams to manage over 1,100 insurance entities worldwide. AON/Benefield Captive & Risk Management Services, LLC, will serve as FIIC’s industry advisor management and provide all back-office support and underwriting. http://www.aon.com/captives/global/index.jsp
Q. How much will a Policy cost?
Roughly speaking, 2% - 5% of the total investment principal with the lower risk scale leaning towards mining and manufacturing and the higher risk scale pointing towards real estate and retail. **Understanding the fact that cost of capital is always variable.
Q. What will the funds be used for?
Q. Is there any current competition?
In today’s market you would have the option to try and secure a form of investment insurance through use of a Lloyd’s type policy, but very few could afford the premium; most would argue it a rigorous process. Understandably, there will be competition that emerges, but FIIC is sitting on top of 20 years of research and analysis, exclusive data and proprietary software, highly experienced partners and the backing of AON.
Q. Will FIIC see additional revenue streams to leverage their risk?
Yes. Each company FIIC insures will produce 5 different streams of revenue in addition to a down the road, capital markets strategy. Those 5 include: 1) Business Plan Services 2) Premium Revenue, 3) Application Consulting Service, 4) SWAT, Asset Recovery, 5) Stock Participation.
Q. Is this Real?
Yes. This is very real. AREI is pleased to bring you the opportunity to purchase shares at this price. It took the backing and support coming from AON to turn the switch on this vision.. The birth of this type of insurance will change the way investors approach their world, creating a paradigm shift and transitioning various investments to a risk managed viewpoint. Feel free to reach out directly to us if you have questions, need a greater understanding of the data and/or software applications or just want to talk through the story and how the concept came to be.
Q. How big is this market?
The overall market has a minimum value at $500 Billion and it’s continuously growing. The need for such a creative insurance program is overwhelming with little or no competition to impede its growth. With 360,000 new companies looking for money each year, the FIIC expects to insure between 250 to 500 companies in its first year, beginning with 1% of the market. That goal would grow to 5% in the second year and it would be an open road for growth from there..
Q. How big is your Data?
It took over ten years (10) to collect and organize enough data for executing this plan. After 2008
the market was in recovery and was not ready. The market is now ready for FIIC. We have also completed an extensive feasibility and actuarial study that was mandatory for the licensing requirement by the DOI, and valuation work for this new product market. The completed work on the proprietary database will allow FIIC to form alliances with several data providers, such as FICO, D&B and Equifax.
Q. How does the process work?
If your Company is looking for equity or debt funding, they will go through an evaluation process. The process begins with a proprietary database: Standard Industrial Classification (SIC) and North American Industry Classification System (NAICS) code covering the period from 1929 through today. The program identifies the critical success and failure outcomes for most U.S. business industries across all states, cities and counties. FIIC asks over 150 qualifying questions about the business as part of the due diligence and underwriting process. After Business process reviews, such as Product, Business Model, Marketing Plan, Management and Financials and other consideration, the final determination is made as to whether the applicant meets eligibility criteria. From this electronic model application, an initial premium is calculated, evaluated and then can be underwritten, while being closely monitored by the FIIC. An approved letter is then issued stating cost and coverage limits.
Q. What is the underwriting capacity?
This new carrier policy has potential for capacity of $2.5 - 3.7 Billion dollars in risk per year. When an applicant is given the green light, the company will underwrite this new insurance policy by insuring the transaction between the business and naming the investor(s)/lender(s) as policy beneficiaries against business failure. This investor/lender protection policy will insure debt or equity investments in both public and private business ventures, so that they do not lose their hard capital. This will provide an unprecedented level of protection to investor/lender and facilitating a stable investment environment for the upstart, growth or newly public company.
Q. Why hasn’t this been done before?
One of the issues was no one could figure out how to accurately quantify the risk involved and make investment insurance profitable! Now that the program is completed, it’s designed to allow insurance protection for the investors against loss, and down the road help companies to find the necessary capital for their venture or future growth. The program works similar to the FDIC which is implemented for banks and also similar to how the FICO system works for consumer loans. Bottom line is that the programs that host FICO and FDIC algorithms are all designed to safely and profitably insure depositors and lenders against risk of loss through credit or bank failure.
Q. How is AREI involved?
AREI has entered into a 9.9% bulk purchase agreement with FIIC. AREI is offering participation in these shares on par with each share of FIIC Common Stock, on a One for One (1:1) relationship. All sales of FIIC stock will be through AREI, LLC, paid directly to AREI. All investor funds will be passed through to ownership of shares at 100%. No commissions will be earned or paid out of the proceeds of this sale.