5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH DS
81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB
67(3+(1 3/('*(5 ; 0$5&,$ * 3/('*(5 1RV 3ODLQWLIIV$SSHOODQWV ! Y 81,7(' 67$7(6 2) $0(5,&$ 'HIHQGDQW$SSHOOHH 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL 1RnsDFN6KHUPDQsU0DJLVWUDWHsXGJH $UJXHG6HSWHPEHU 'HFLGHGDQG)LOHG'HFHPEHU %HIRUH*8<DQG0225(&LUFXLWsXGJHV'2:' 'LVWULFWsXGJH
7KH +RQRUDEOH 'DYLG ' 'RZG 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
3OHGJHUHWDOY8QLWHG6WDWHV 1RV
BBBBBBBBBBBBBBBBB &2816(/ $5*8(' sDPHV + 6WHWKHP 526(1%(5* +(5)(/ 67(7+(0 %(1'(5&LQFLQQDWL2KLRIRU$SSHOODQWV 0DULRQ(0(ULFNVRQ86'(3$570(172)s867,&( $33(//$7( 6(&7,21 :DVKLQJWRQ '& IRU $SSHOOHH 21%5,()sDPHV+6WHWKHP526(1%(5*+(5)(/ 67(7+(0 %(1'(5&LQFLQQDWL2KLRsDPHV90DJHH sU&LQFLQQDWL2KLRIRU$SSHOODQWV0DULRQ(0(ULFNVRQ %UXFH 5 (OOLVHQ 86 '(3$570(17 2) s867,&( $33(//$7(6(&7,21:DVKLQJWRQ'&IRU$SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB .$5(1 1(/621 0225( &LUFXLW sXGJH 7KLV FDVH LQYROYHVWKHTXHVWLRQRIZKHWKHULQGLYLGXDOWD[SD\HUVZHUH mDWULVNlDVGHILQHGLQ86&EZLWKUHJDUGWRD WKUHHSDUW\ VDOHOHDVHEDFN WUDQVDFWLRQ EHWZHHQ D SDUHQW FRPSDQ\ DQG WZR RI LWV VXEVLGLDULHV DQG FRXOG WKHUHIRUH GHGXFWORVVHVIURPDQLQYHVWPHQWLQDWUXVWIRUPHGE\RQHRI WKHVXEVLGLDULHV,QWKHWD[\HDUVHQGLQJLQ DQG 3ODLQWLIIV$SSHOODQWV 6WHSKHQ m3OHGJHUl DQG 0DUFLD3OHGJHUm0UV3OHGJHUlFROOHFWLYHO\UHIHUUHGWRDV mWKH 3OHGJHUVl FODLPHG ORVVHV GHULYLQJ IURP 3OHGJHUjV LQYHVWPHQW LQ D WUXVW XQGHU 7KH ,QWHUQDO 5HYHQXH 6HUYLFH m,56l KRZHYHU GLVDOORZHG WKH 3OHGJHUVj ORVV GHGXFWLRQV DQG LQVWHDG DVVHVVHG DQ DPRXQW WRWDOLQJ DSSUR[LPDWHO\ LQ WD[HV SHQDOWLHV DQG LQWHUHVW DJDLQVWWKH3OHGJHUV7KH3OHGJHUVSDLGWKHDVVHVVHGDPRXQW DQG WKHQ ILOHG FODLPV IRU UHIXQGV DQG DPHQGHG LQGLYLGXDO LQFRPHWD[UHWXUQVIRUHDFKRIWKHDIRUHPHQWLRQHGWD[\HDUV EXWWKH,56GHQLHGWKHLUFODLPV 7KH3OHGJHUVWKHQILOHGWKLVODZVXLWDJDLQVWWKH,56LQWKH 8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH6RXWKHUQ'LVWULFWRI2KLR ZKLFKZDVWUDQVIHUUHGWRD8QLWHG6WDWHV0DJLVWUDWHsXGJH 3OHGJHUHWDOY8QLWHG6WDWHV 1RV 1RV 3OHGJHUHWDOY8QLWHG6WDWHV
RIIDFW7KHUHIRUHZHKROGWKDWWKHUHZDVQRLQFRQVLVWHQF\LQ $IWHUKROGLQJDEHQFKWULDOSXUVXDQWWRWKHSDUWLHVjFRQVHQW WKHGHFLVLRQVUHQGHUHGE\WKHPDJLVWUDWHMXGJHRQWKH,56jV WKHPDJLVWUDWHMXGJHLVVXHGDQRSLQLRQZKLFKKHOGWKDWWKH PRWLRQVIRUVXPPDU\MXGJPHQWDQG WKHPDJLVWUDWHMXGJHjV 3OHGJHUVZHUHQRWDWULVNXQGHUDQGHQWHUHGMXGJPHQW RSLQLRQIROORZLQJWKHEHQFKWULDORQWKHPHULWV LQIDYRURIWKH,56 ,,,&21&/86,21 7KH3OHGJHUVQRZDSSHDOWKHPDJLVWUDWHMXGJHjVGHFLVLRQ FODLPLQJWKDWWKHPDJLVWUDWHMXGJHHUUHGLQGHWHUPLQLQJWKDW )RUWKHUHDVRQVVWDWHGDERYHZH$)),50WKHPDJLVWUDWH WKH\ ZHUH QRW DW ULVN XQGHU DQG WKDW WKH PDJLVWUDWH MXGJHjVGHFLVLRQ MXGJHjVGHFLVLRQIURPWKHEHQFKWULDOZDVLQFRQVLVWHQWZLWK KLV SUHYLRXV UXOLQJV RQ WKH ,56jV PRWLRQV IRU VXPPDU\ MXGJPHQW)RUWKHUHDVRQVWKDWIROORZZH$)),50 ,%$&.*5281' ,Q$XJXVWRI$PHULFDQ%URDGFDVWLQJ&RPSDQLHV,QF m$%&l DFTXLUHG WZR VDWHOOLWH WUDQVSRQGHUV IURP 5&$ $PHULFDQ&RPPXQLFDWLRQV,QF7UDQVSRQGHUVDUHHOHFWURQLF GHYLFHVWKDWUHFHLYHVHOHFWDPSOLI\DQGUHWUDQVPLWYRLFH GDWDDQGYLGHRVLJQDOV,Q0D\RI$%&DVVLJQHGDOORI LWVULJKWVEHQHILWVUHVSRQVLELOLWLHVDQGOLDELOLWLHVZLWKUHVSHFW WRWKHWZRWUDQVSRQGHUVWRLWVZKROO\RZQHGVXEVLGLDU\$%& 9LGHR(QWHUSULVHV,QFm$%&9LGHRl 2Q2FWREHUDQG,QWHJUDWHG(TXLSPHQW/HDVLQJ &RUSRUDWLRQ m,(/&l D ZKROO\ RZQHG VXEVLGLDU\ RI ,QWHJUDWHG 5HVRXUFHV ,QF m,QWHJUDWHGl DFTXLUHG WKH WZR WUDQVSRQGHUV IURP $%& 9LGHR IRU D SXUFKDVH SULFH RI HDFK7KHQRQ2FWREHUWKHYHU\VDPH GD\WKDW,(/&KDGFRPSOHWHGLWVSXUFKDVHRIWKHWUDQVSRQGHUV ,(/&HQWHUHGLQWRWZRLGHQWLFDOOHDVHDJUHHPHQWVZLWK$%& 9LGHR 2Q'HFHPEHU,(/&VROGWKHWZRWUDQVSRQGHUVWR ,QYHVWRUV&UHGLW&RUSRUDWLRQm,&&lDQRWKHUZKROO\RZQHG VXEVLGLDU\RI,QWHJUDWHG,&&SDLGWKHSXUFKDVHSULFHIRUWKH WUDQVSRQGHUV ZLWK D FDVK GRZQSD\PHQW DQG D SURPLVVRU\
:LWK WKH H[FHSWLRQ RI WKH IDFWV GHWDLOLQJ WKH DFWLYLWLHV WKDW RFFXUUHG DIWHU WKH 3OHGJHUV ILOHG WKLV ODZVXLW WKH EDFNJURXQG IDFWV DUH GHULYHG IURP WKH sRLQW 6WLSXODWLRQ RI )DFWV ILOHG ZLWK WKH PDJLVWUDWH MXGJH 3OHGJHUHWDOY8QLWHG6WDWHV 1RV 1RV 3OHGJHUHWDOY8QLWHG6WDWHV
Free access — add to your briefcase to read the full text and ask questions with AI
5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH DS
81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB
67(3+(1 3/('*(5 ; 0$5&,$ * 3/('*(5 1RV 3ODLQWLIIV$SSHOODQWV ! Y 81,7(' 67$7(6 2) $0(5,&$ 'HIHQGDQW$SSHOOHH 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL 1RnsDFN6KHUPDQsU0DJLVWUDWHsXGJH $UJXHG6HSWHPEHU 'HFLGHGDQG)LOHG'HFHPEHU %HIRUH*8<DQG0225(&LUFXLWsXGJHV'2:' 'LVWULFWsXGJH
7KH +RQRUDEOH 'DYLG ' 'RZG 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
3OHGJHUHWDOY8QLWHG6WDWHV 1RV
BBBBBBBBBBBBBBBBB &2816(/ $5*8(' sDPHV + 6WHWKHP 526(1%(5* +(5)(/ 67(7+(0 %(1'(5&LQFLQQDWL2KLRIRU$SSHOODQWV 0DULRQ(0(ULFNVRQ86'(3$570(172)s867,&( $33(//$7( 6(&7,21 :DVKLQJWRQ '& IRU $SSHOOHH 21%5,()sDPHV+6WHWKHP526(1%(5*+(5)(/ 67(7+(0 %(1'(5&LQFLQQDWL2KLRsDPHV90DJHH sU&LQFLQQDWL2KLRIRU$SSHOODQWV0DULRQ(0(ULFNVRQ %UXFH 5 (OOLVHQ 86 '(3$570(17 2) s867,&( $33(//$7(6(&7,21:DVKLQJWRQ'&IRU$SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB .$5(1 1(/621 0225( &LUFXLW sXGJH 7KLV FDVH LQYROYHVWKHTXHVWLRQRIZKHWKHULQGLYLGXDOWD[SD\HUVZHUH mDWULVNlDVGHILQHGLQ86&EZLWKUHJDUGWRD WKUHHSDUW\ VDOHOHDVHEDFN WUDQVDFWLRQ EHWZHHQ D SDUHQW FRPSDQ\ DQG WZR RI LWV VXEVLGLDULHV DQG FRXOG WKHUHIRUH GHGXFWORVVHVIURPDQLQYHVWPHQWLQDWUXVWIRUPHGE\RQHRI WKHVXEVLGLDULHV,QWKHWD[\HDUVHQGLQJLQ DQG 3ODLQWLIIV$SSHOODQWV 6WHSKHQ m3OHGJHUl DQG 0DUFLD3OHGJHUm0UV3OHGJHUlFROOHFWLYHO\UHIHUUHGWRDV mWKH 3OHGJHUVl FODLPHG ORVVHV GHULYLQJ IURP 3OHGJHUjV LQYHVWPHQW LQ D WUXVW XQGHU 7KH ,QWHUQDO 5HYHQXH 6HUYLFH m,56l KRZHYHU GLVDOORZHG WKH 3OHGJHUVj ORVV GHGXFWLRQV DQG LQVWHDG DVVHVVHG DQ DPRXQW WRWDOLQJ DSSUR[LPDWHO\ LQ WD[HV SHQDOWLHV DQG LQWHUHVW DJDLQVWWKH3OHGJHUV7KH3OHGJHUVSDLGWKHDVVHVVHGDPRXQW DQG WKHQ ILOHG FODLPV IRU UHIXQGV DQG DPHQGHG LQGLYLGXDO LQFRPHWD[UHWXUQVIRUHDFKRIWKHDIRUHPHQWLRQHGWD[\HDUV EXWWKH,56GHQLHGWKHLUFODLPV 7KH3OHGJHUVWKHQILOHGWKLVODZVXLWDJDLQVWWKH,56LQWKH 8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH6RXWKHUQ'LVWULFWRI2KLR ZKLFKZDVWUDQVIHUUHGWRD8QLWHG6WDWHV0DJLVWUDWHsXGJH 3OHGJHUHWDOY8QLWHG6WDWHV 1RV 1RV 3OHGJHUHWDOY8QLWHG6WDWHV
RIIDFW7KHUHIRUHZHKROGWKDWWKHUHZDVQRLQFRQVLVWHQF\LQ $IWHUKROGLQJDEHQFKWULDOSXUVXDQWWRWKHSDUWLHVjFRQVHQW WKHGHFLVLRQVUHQGHUHGE\WKHPDJLVWUDWHMXGJHRQWKH,56jV WKHPDJLVWUDWHMXGJHLVVXHGDQRSLQLRQZKLFKKHOGWKDWWKH PRWLRQVIRUVXPPDU\MXGJPHQWDQG WKHPDJLVWUDWHMXGJHjV 3OHGJHUVZHUHQRWDWULVNXQGHUDQGHQWHUHGMXGJPHQW RSLQLRQIROORZLQJWKHEHQFKWULDORQWKHPHULWV LQIDYRURIWKH,56 ,,,&21&/86,21 7KH3OHGJHUVQRZDSSHDOWKHPDJLVWUDWHMXGJHjVGHFLVLRQ FODLPLQJWKDWWKHPDJLVWUDWHMXGJHHUUHGLQGHWHUPLQLQJWKDW )RUWKHUHDVRQVVWDWHGDERYHZH$)),50WKHPDJLVWUDWH WKH\ ZHUH QRW DW ULVN XQGHU DQG WKDW WKH PDJLVWUDWH MXGJHjVGHFLVLRQ MXGJHjVGHFLVLRQIURPWKHEHQFKWULDOZDVLQFRQVLVWHQWZLWK KLV SUHYLRXV UXOLQJV RQ WKH ,56jV PRWLRQV IRU VXPPDU\ MXGJPHQW)RUWKHUHDVRQVWKDWIROORZZH$)),50 ,%$&.*5281' ,Q$XJXVWRI$PHULFDQ%URDGFDVWLQJ&RPSDQLHV,QF m$%&l DFTXLUHG WZR VDWHOOLWH WUDQVSRQGHUV IURP 5&$ $PHULFDQ&RPPXQLFDWLRQV,QF7UDQVSRQGHUVDUHHOHFWURQLF GHYLFHVWKDWUHFHLYHVHOHFWDPSOLI\DQGUHWUDQVPLWYRLFH GDWDDQGYLGHRVLJQDOV,Q0D\RI$%&DVVLJQHGDOORI LWVULJKWVEHQHILWVUHVSRQVLELOLWLHVDQGOLDELOLWLHVZLWKUHVSHFW WRWKHWZRWUDQVSRQGHUVWRLWVZKROO\RZQHGVXEVLGLDU\$%& 9LGHR(QWHUSULVHV,QFm$%&9LGHRl 2Q2FWREHUDQG,QWHJUDWHG(TXLSPHQW/HDVLQJ &RUSRUDWLRQ m,(/&l D ZKROO\ RZQHG VXEVLGLDU\ RI ,QWHJUDWHG 5HVRXUFHV ,QF m,QWHJUDWHGl DFTXLUHG WKH WZR WUDQVSRQGHUV IURP $%& 9LGHR IRU D SXUFKDVH SULFH RI HDFK7KHQRQ2FWREHUWKHYHU\VDPH GD\WKDW,(/&KDGFRPSOHWHGLWVSXUFKDVHRIWKHWUDQVSRQGHUV ,(/&HQWHUHGLQWRWZRLGHQWLFDOOHDVHDJUHHPHQWVZLWK$%& 9LGHR 2Q'HFHPEHU,(/&VROGWKHWZRWUDQVSRQGHUVWR ,QYHVWRUV&UHGLW&RUSRUDWLRQm,&&lDQRWKHUZKROO\RZQHG VXEVLGLDU\RI,QWHJUDWHG,&&SDLGWKHSXUFKDVHSULFHIRUWKH WUDQVSRQGHUV ZLWK D FDVK GRZQSD\PHQW DQG D SURPLVVRU\
:LWK WKH H[FHSWLRQ RI WKH IDFWV GHWDLOLQJ WKH DFWLYLWLHV WKDW RFFXUUHG DIWHU WKH 3OHGJHUV ILOHG WKLV ODZVXLW WKH EDFNJURXQG IDFWV DUH GHULYHG IURP WKH sRLQW 6WLSXODWLRQ RI )DFWV ILOHG ZLWK WKH PDJLVWUDWH MXGJH 3OHGJHUHWDOY8QLWHG6WDWHV 1RV 1RV 3OHGJHUHWDOY8QLWHG6WDWHV
QRWH SD\DEOH WR ,(/& $OVR RQ 'HFHPEHU ,&& &6WDQGDUG)RU7ULDO9HUVXV6XPPDU\sXGJPHQW DJUHHG WR OHDVH WKH WUDQVSRQGHUV EDFN WR ,(/& 7KLV DJUHHPHQW UHTXLUHG ,(/& WR SD\ ,&& IL[HG UHQW WKDW 7KH3OHGJHUVDOVRDUJXHWKDWWKHEHQFKWULDOGHFLVLRQLQWKLV DSSUR[LPDWHO\ HTXDOHG LQ ERWK WLPH DQG DPRXQW WKH FDVH LV LQFRQVLVWHQW ZLWK WKH PDJLVWUDWH MXGJHjV SUHYLRXV SD\PHQWVWKDW,&&RZHGWR,(/&$VDQLQFHQWLYHIRU,&&WR GHFLVLRQVRQWKH,56jVPRWLRQVIRUVXPPDU\MXGJPHQW:H HQWHULQWRWKLVPDVWHUOHDVHDJUHHPHQWZLWK,(/&,QWHJUDWHG GLVDJUHH7KHVWDQGDUGWKDWWKHPDJLVWUDWHMXGJHZDVUHTXLUHG DJUHHGWRJXDUDQWHHXQFRQGLWLRQDOO\,(/&jVUHQWDOSD\PHQWV WR DSSO\ LQ UHQGHULQJ D GHFLVLRQ RQ WKH ,56jV PRWLRQV IRU XQGHUWKHPDVWHUOHDVHDJUHHPHQW VXPPDU\MXGJPHQWVXEVWDQWLDOO\GLIIHUHGIURPWKHVWDQGDUG IRUGHFLGLQJWKHLVVXHVLQWKHFDVHDIWHUWULDO 2Q WKH YHU\ VDPH GD\ LQ ZKLFK LW KDG ERWK ERXJKW DQG OHDVHGWKHWZRWUDQVSRQGHUV,&&IRUPHG6DWHOOLWH(TXLSPHQW :KHQ FRQVLGHULQJ WKH ,56jV PRWLRQV IRU VXPPDU\ 7UXVW $ mWKH 7UXVWl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
,&&jVRIILFHWKHDPRXQWRIEXVLQHVVGLVFUHWLRQGLVSOD\HG WKH3OHGJHUVZHUHQRWDWULVNXQGHUZLWKUHVSHFWWRWKH E\ WKH GRPLQDWHG FRPSDQ\ DV VKRZQ E\ ,QWHJUDWHGjV QRWH WR ,&& DQG DVVHVVHG DGGLWLRQDO WD[HV SHQDOWLHV DQG LQYROYHPHQWLQ,&&jVELOOLQJDQGDFFRXQWLQJZRUNDQGWKH LQWHUHVWDJDLQVWWKH3OHGJHUV7KH3OHGJHUVWKHQIXOO\SDLG FUHDWLRQRIWKH7UXVWWKHFRUSRUDWLRQVjIDLOXUHWRGHDOZLWK WKHVHDPRXQWVDQGILOHGFODLPVIRUUHIXQGVEXWWKHLUFODLPV HDFK RWKHU DW DUPjV OHQJWK DV VKRZQ E\ ,&&jV XVH RI ZHUHGHQLHG ,QWHJUDWHGjV IRUPV LQ FUHDWLQJ WKH 7UXVW DQG ,QWHJUDWHGjV FRXQVHODQGHPSOR\HHVLQUHYLHZLQJWKHQHFHVVDU\GRFXPHQWV 7KH3OHGJHUV WKHQ ILOHGWKLVODZVXLWLQWKH8QLWHG6WDWHV WKHFRUSRUDWLRQVjIDLOXUHWRWUHDWWKHDOOHJHGO\GRPLQDWHG 'LVWULFW&RXUWIRUWKH6RXWKHUQ'LVWULFWRI2KLR2Qs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jVPRWLRQ $JUHHPHQWHQWHUHGLQWREHWZHHQ,QWHJUDWHGDQG,&&DQG IRUVXPPDU\MXGJPHQWRQWKHJURXQGWKDWWKHUHZHUHJHQXLQH WKHVXEVLGLDU\jVXVHRIWKHSDUHQWjVSURSHUW\DVLILWZHUHLWV LVVXHV RI PDWHULDO IDFW UHJDUGLQJ WKH UHODWLRQVKLS EHWZHHQ RZQDVVKRZQE\,&&jVXVHRI,QWHJUDWHGjVRIILFHVSDFHDQG ,QWHJUDWHGDQG,&& GRFXPHQW IRUPV ,Q VXP WKH UHOHYDQW IDFWRUV XQGHU 1HZ D@VFRXQVHO PHDQLQJRI ZRXOGUHYLHZDQGVXSHUYLVHWKHGUDIWLQJRIWKDWPHPRUDQGXP 3OHGJHUHWDOY8QLWHG6WDWHV 1RV 1RV 3OHGJHUHWDOY8QLWHG6WDWHV
ZKLFKZDVGUDIWHGE\RXWVLGHFRXQVHODQG>KDG@LQSXWRQ ZHUHHPSOR\HHVRI,QWHJUDWHGs$DWsXQJ'HSDW DORWRIIDFWXDOPDWWHUVDQGMXVWUHYLHZLQJWKHGHYHORSPHQWRI /LNHZLVH WKH PDJLVWUDWH MXGJHjV FRQFOXVLRQV WKDW WKHGRFXPHQWlsRLQW$SSHQGL[ms$lDWsXQJ'HSDW ,QWHJUDWHGZDVLQYROYHGLQVHWWLQJXSWKH7UXVWWKDW,QWHJUDWHG DQG,&&GLGQRWGHDOZLWKHDFKRWKHUDWDUPjVOHQJWKWKDW,&& ZDVIRUPHGWRSURYLGHILQDQFLQJWRLQYHVWRUVDQGWKDW,&& :LWK UHJDUG WR WKH RSHUDWLRQ RI ,&& sXQJ WHVWLILHG WKDW GLGQRWKDYHDQ\GLVFUHWLRQLQLWVDFWLYLWLHVDQGGLGQRWDFW ,&&jVGD\WRGD\RSHUDWLRQVFRQVLVWHGRIELOOLQJFROOHFWLQJ LQGHSHQGHQWO\ IURP ,QWHJUDWHG DUH VXSSRUWHG E\ sXQJjV DQGDFFRXQWLQJIRUWUDQVDFWLRQVEHWZHHQLQYHVWRUVDQG,&& WHVWLPRQ\WKDW,&&ZDVIRUPHGE\,QWHJUDWHGWRKHOSILQDQFH EXW WKDW ,QWHJUDWHGjV DFFRXQWLQJ GHSDUWPHQW KDQGOHG WKH LQYHVWPHQWVLQWKH7UXVWWKDWWKHLQYHVWRUVjSURPLVVRU\QRWHV UHFRUGLQJ DQG UHSRUWLQJ IXQFWLRQV IRU ,&& sXQJ IXUWKHU WR ,&& ZHUH VWDQGDUG IRUP QRWHV GHYHORSHG LQ SDUW E\ H[SODLQHG WKDW ,&&jV RIILFHV ZHUH ORFDWHG DW WKH RIILFHV RI ,QWHJUDWHGHPSOR\HHVWKDWsXQJSDUWLFLSDWHGLQDQGVXSHUYLVHG ,QWHJUDWHG DQG ZKLOH KH WHVWLILHG WKDW ,&&jV RIILFHUV DQG WKHGUDIWLQJRIWKH&RQILGHQWLDO0HPRUDQGXPIRUWKH7UXVW GLUHFWRUVFRQWUROOHGWKHGD\WRGD\RSHUDWLRQVRI,&&KHGLG DQGWKDW,QWHJUDWHGjVDFFRXQWLQJGHSDUWPHQWKDQGOHG,&&jV QRWLGHQWLI\WKHGDLO\WDVNVWKH\SHUIRUPHGIRU,&&sXQJDOVR UHFRUGLQJ DQG UHSRUWLQJ IXQFWLRQV s$ DW VWDWHG WKDW ZLWK RQH H[FHSWLRQ DOO RI WKH RIILFHUV DQG sXQJ'HSDW)LQDOO\WKHPDJLVWUDWHMXGJHjV GLUHFWRUVRI,&&ZHUHDOVRRIILFHUVRI,QWHJUDWHGsXQJIXUWKHU ILQGLQJ WKDW ,QWHJUDWHGjV JXDUDQW\ XQGHU WKH PDVWHU OHDVH VWDWHGWKDWKHZDVmIDLUO\FHUWDLQlWKDWDOOPRQLHVWKDWZHUH DJUHHPHQWLQXUHGWRWKHEHQHILWRIWKH3OHGJHUVLVVXSSRUWHG UHPLWWHGIURPLQYHVWRUVWR,&&ZHQWWR,QWHJUDWHGs$DW E\D'HFHPEHU*XDUDQW\$JUHHPHQWHQWHUHGLQWR sXQJ'HSDW:LWKDOOWKLVVDLGWKRXJKLQUHVSRQVHWR EHWZHHQ,QWHJUDWHGDQG,&&s$DWm*XDUDQW\lDW DTXHVWLRQE\WKH3OHGJHUVjFRXQVHOUHJDUGLQJZKHWKHUsXQJ EHOLHYHGWKDWm,&&ZDVDVHSDUDWHHQWLW\LQWKHOHJDOVHQVHl sXQJDVVHUWHGm,GRls$DWsXQJ'HSDWHPSKDVLV ,QOLJKWRIWKHPDJLVWUDWHMXGJHjVIDFWXDOILQGLQJVZKLFKDUH DGGHG QRWFOHDUO\HUURQHRXVZHFRQFOXGHWKDWWKHPDJLVWUDWHMXGJH GLGQRWHUULQFRQFOXGLQJWKDW,&&ZDVDQLQVWUXPHQWDOLW\RI 8VLQJWKHWHVWLPRQ\IURPsXQJjVGHSRVLWLRQDVLWVVXSSRUW ,QWHJUDWHG 2I WKH WHQ IDFWRUV OLVWHG LQ WKH DSSOLFDEOH WHVW WKH,56WKHQILOHGDUHQHZHGPRWLRQIRUVXPPDU\MXGJPHQW XQGHU 1HZ
GD\WRGD\DFWLYLWLHVWKDWZHUHEHLQJSHUIRUPHGE\,&& ,QWHJUDWHG 7KH UHFRUG VXSSRUWV WKH PDJLVWUDWH MXGJHjV ,QVWHDGKHWHVWLILHGWKDW,QWHJUDWHGjVVWDIIPDQDJHGWKH FRQFOXVLRQ WKDW ,QWHJUDWHG H[HUFLVHG VXFK FRQWURO DQG DFFRXQWLQJ DFWLYLWLHV 0U sXQJ DWWHPSWHG WR LGHQWLI\ GRPLQLRQRYHU,&&WKDW,&&ZDVDGXPP\FRUSRUDWLRQIRU FHUWDLQPDUNHWLQJIXQFWLRQVWKDWZHUHSHUIRUPHGE\,&& ,QWHJUDWHGWKHUHE\PDNLQJ,QWHJUDWHGERWKWKHJXDUDQWRUDQG DVHVVHQWLDOO\DmZKROHVDOHUlWKDWSUHVHQWHGSDFNDJHVWR SD\HHLQWKHWKUHHSDUW\VDOHOHDVHEDFNWUDQVDFWLRQDWLVVXH,Q ,QWHJUDWHGjVHTXLW\VDOHVJURXS+RZHYHU0UsXQJWKHQ VXP ZH EHOLHYH WKDW WKH PDJLVWUDWH MXGJH ZDV FRUUHFW LQ H[SODLQHG WKDW D ZKROHVDOHU JURXS ZLWKLQ ,QWHJUDWHG FRQFOXGLQJWKDWWKH3OHGJHUVZHUHQRWmDWULVNlRILQFXUULQJ SHUIRUPHGWKHVHWDVNV DQ\ORVVHVIURPWKHLQYHVWPHQWLQWKH7UXVWHYHQLILWSURYHG WREHXQSURILWDEOHEHFDXVHDQ\GHEWVWKDWWKH\RZHGWR,&& 7KH&RXUWILQGVWKDW,&&GLGQRWDFWLQGHSHQGHQWO\ WKURXJK WKH 7UXVW ZRXOG EH FDQFHOHG RXW E\ ,QWHJUDWHGjV ,QVWHDGLWVIXQFWLRQVZHUHUHYLHZHGE\RWKHU,QWHJUDWHG JXDUDQW\RI,(/&jVREOLJDWLRQVWRWKH7UXVW JURXSVDQGLWZDVPDQDJHGDVDGLYLVLRQRI,QWHJUDWHG $6L[WK&LUFXLW,QWHUSUHWDWLRQRIm$W5LVNl s$DWFLWDWLRQVRPLWWHG 6HFWLRQD RIWKH,QWHUQDO5HYHQXH&RGHSURYLGHV :H KROG WKDW WKHVH IDFWXDO ILQGLQJV DUH QRW FOHDUO\ WKDWDWD[SD\HUZKRLVHQJDJHGLQFHUWDLQGHVLJQDWHGDFWLYLWLHV HUURQHRXVEHFDXVHWKHUHLVVXIILFLHQWHYLGHQFHLQWKHUHFRUGWR PD\GHGXFWORVVHVRFFXUULQJIURPWKHVHDFWLYLWLHVRQO\WRWKH VXSSRUWDOORIWKHP7REHJLQWKH&RQILGHQWLDO0HPRUDQGXP H[WHQWWKDWWKHWD[SD\HULVmDWULVNlIRUVXFKDFWLYLWLHVDWWKH IRUWKH7UXVWUHYHDOVWKDW,&&jVWRWDODVVHWVDVRI1RYHPEHU FORVHRIDWD[DEOH\HDU86&D (TXLSPHQW LQFOXGHG RQO\ LQ FDVK DQG D OHDVLQJZKLFKLVWKHW\SHRIDFWLYLW\LQYROYHGLQWKLVFDVH GHPDQGSURPLVVRU\QRWHIURP,QWHJUDWHGjVSXUFKDVHRI,&&jV FRPHVZLWKLQWKHWHUPVRI86&F & FRPPRQ VWRFN s$ DW 6DWHOOLWH (TXLSPHQW 7UXVW $ &RQILGHQWLDO0HPRUDQGXPm%DODQFH6KHHWRI,&&lDW 8QGHU E D WD[SD\HU LV mDW ULVNl IRU DPRXQWV RI $GGLWLRQDOO\ WKH PDJLVWUDWH MXGJHjV FRQFOXVLRQ WKDW DOO RI PRQH\DQGWKHDGMXVWHGEDVLVRIRWKHUSURSHUW\FRQWULEXWHGE\ 3OHGJHUjVSD\PHQWVRQKLV,&&QRWHZHUHVHQWWR,QWHJUDWHGjV WKH WD[SD\HU WR WKH GHVLJQDWHG DFWLYLW\ 86& SODFHRIEXVLQHVVDQGZHUHXOWLPDWHO\UHFHLYHGE\,QWHJUDWHG E $$WD[SD\HULVDOVRmDWULVNlIRUDPRXQWVRI LV VXSSRUWHG E\ SKRWRFRSLHV RI ELOOLQJ VWDWHPHQWV IURP PRQH\ERUURZHGIRUXVHLQWKHDFWLYLW\WRWKHH[WHQWWKDWKHLV ,QWHJUDWHGWR3OHGJHUZKLFKGRQRWKDYH,&&jVQDPHRQWKHP SHUVRQDOO\OLDEOHIRUWKHUHSD\PHQWRIVXFKDPRXQWVRUWRWKH DQG ZKLFK UHTXLUH WKDW TXHVWLRQV DQG FRUUHVSRQGHQFH EH H[WHQWWKDWKHKDVSOHGJHGSURSHUW\RWKHUWKDQWKHSURSHUW\ GLUHFWHGWR,QWHJUDWHG6XFKFRQFOXVLRQLVDOVRVXSSRUWHGE\ XVHGLQWKHDFWLYLW\DVVHFXULW\IRUVXFKERUURZHGDPRXQWV SKRWRFRSLHVRIFKHFNVIURP3OHGJHUZKLFKZHUHVHQWWRWKH 86&E $WD[SD\HUKRZHYHULVQRWmDWULVN 7UXVW mFRl ,QWHJUDWHG s$ DW )XUWKHUPRUH WKH ZLWK UHVSHFW WR DPRXQWV SURWHFWHG DJDLQVW ORVV WKURXJK PDJLVWUDWHMXGJHjVFRQFOXVLRQVWKDW,&&ZDVORFDWHGDWWKH QRQUHFRXUVHILQDQFLQJJXDUDQWHHVVWRSORVVDJUHHPHQWVRU RIILFHV RI ,QWHJUDWHG DQG WKDW ,&& DQG ,QWHJUDWHG KDYH DQ RWKHUVLPLODUDUUDQJHPHQWVl86&E RYHUODSLQRIILFHUVGLUHFWRUVDQGSHUVRQQHODUHVXSSRUWHGE\ sXQJjV GHSRVLWLRQ WHVWLPRQ\ WKDW ,&& ZDV ORFDWHG DW 7KH6L[WK&LUFXLWKDVDQDO\]HGWKHmDWULVNlSURYLVLRQVLQ ,QWHJUDWHGjVRIILFHVDQGWKDWDOORI,&&jVRIILFHUVDQGGLUHFWRUV ZLWKUHVSHFWWRDWKUHHSDUW\VDOHOHDVHEDFNWUDQVDFWLRQ LQ RQO\ WZR SXEOLVKHG RSLQLRQV 6HH 0DUWXFFLR Y &RPPLVVLRQHU )G WK &LU (PHUVKDZY&RPPLVVLRQHU)GWK&LU,Q WKHVHFDVHVWKH6L[WK&LUFXLWUHMHFWHGWKHUHDVRQLQJRIHYHU\ ,&& ZDV LQFRUSRUDWHG LQ 1RYHPEHU 3OHGJHUHWDOY8QLWHG6WDWHV 1RV 1RV 3OHGJHUHWDOY8QLWHG6WDWHV
RWKHUFLUFXLWDGGUHVVLQJWKLVLVVXHZKLFKKHOGWKDWWKHFLUFXODU VHQW ODWH QRWLFHV RQ LWV RZQ ELOOLQJ VWDWHPHQWV DQG WKH RIIVHWWLQJ VWUXFWXUH RI SD\PHQWV LQ D WKUHHSDUW\ VWDWHPHQWVSURYLGHGWKDWTXHVWLRQVDQGFRUUHVSRQGHQFH VDOHOHDVHEDFN WUDQVDFWLRQ LV VXIILFLHQW WR WULJJHU WKH VKRXOGEHGLUHFWHGWR,QWHJUDWHG E H[FHSWLRQIURPmDWULVNlWUHDWPHQWIRUQRWHVWKDW ZLOOEHSDLGWKURXJKDFLUFOHRISD\PHQWV6HHHJ:DWHUVY ,&&LVORFDWHGDWWKHRIILFHVRI,QWHJUDWHG5HVRXUFHV &RPPLVVLRQHU)GG&LUFHUW GHQLHG86RXV@ SRWHQWLDO FOLHQWV OLNH $%& RISRFNHWH[SHQVHV6HH(PHUVKDZ)GDW7KLV ORRNLQJIRUDWUDQVDFWLRQ>@WKDWWKH\FRXOGVWUXFWXUH2QFH DQDO\VLVUHJDUGLQJZKHWKHUDWD[SD\HULVmDWULVNlZLWKLQWKH WKH SURGXFW ZDV LGHQWLILHG ,QWHJUDWHGjV HTXLW\ PHDQLQJRIEZDVILUVWDGRSWHGE\WKH6L[WK&LUFXLWLQ PDUNHWLQJJURXSZDVLQYROYHGLQVWUXFWXULQJWKH7UXVW (PHUVKDZ DQG ZDV ODWHU IROORZHG E\ WKLV FRXUW LQ 0DUWXFFLR ,&&DQG,QWHJUDWHGGLGQRWGHDOZLWKHDFKRWKHUDW DUPVOHQJWK,QRXWOLQLQJLWVFRQIOLFWVRILQWHUHVWLQWKH ,Q(PHUVKDZ&,6/HDVLQJ&RUSRUDWLRQm&,6lSXUFKDVHG RIIHULQJV PHPRUDQGXP ,QWHJUDWHG GLVFORVHG WKDW mWKH FRPSXWHUV DQG FRPSXWHU SHULSKHUDOV IURP WKH ,%0 WHUPVRIWKHDJUHHPHQWVDQGRWKHULQVWUXPHQWVUHIHUUHGWR &RUSRUDWLRQ m,%0l IRU 7R ILQDQFH WKHVH KHUHLQLQFOXGLQJWKH0DVWHU/HDVHDQGWKH%HQHILFLDU\ SXUFKDVHV&,6WRRNRXWDQXPEHURIQRQUHFRXUVHEDQNORDQV 1RWHVDQGWKHFRPSHQVDWLRQWREHSDLGWR,&&DQGLWV $IWHUOHDVLQJWKHHTXLSPHQWWRHQGXVHUV&,6WKHQVROGWKH $IILOLDWHVKDYHEHHQRUZLOOEHHVWDEOLVKHGE\,QWHJUDWHG HTXLSPHQWIRUWR3URJUDP/HDVLQJ&RUSRUDWLRQ DQGDUHQRWDQGZLOOQRWEHWKHUHVXOWRIDUPjVOHQJWK m3URJUDPlZKLFKSDLGLQFDVKDVDGRZQSD\PHQW QHJRWLDWLRQVDPRQJLQGHSHQGHQWSDUWLHV>@l DQGSDLGWKHEDODQFHRIWKHSXUFKDVHSULFHZLWKDQLQVWDOOPHQW QRWH(PHUVKDZ)GDW3URJUDPWKHQVROGWKH ,&&ZDVIRUPHGWRSURYLGHILQDQFLQJWRLQYHVWRUV HTXLSPHQWIRUWR/($LQZKLFKWKH(PHUVKDZV 7KHWHUPVRIWKHSURPLVVRU\QRWHVWKDWLQYHVWRUVLVVXHG ZHUHSDUWQHUV)RULWVSXUFKDVH/($SDLGDVPDOOFDVKGRZQ WR,&&ZHUHQHJRWLDWHGEHWZHHQLQYHVWRUjVFRXQVHODQG SD\PHQWDQGJDYH3URJUDPDSDUWLDOUHFRXUVHLQVWDOOPHQWQRWH PHPEHUVRI,QWHJUDWHGjVHTXLSPHQWOHDVHJURXS HTXDO WR WKH LQVWDOOPHQW QRWH 3URJUDP KDG JLYHQ &,6 ,&& GLG QRW KDYH DQ\ GLVFUHWLRQ LQ LWV DFWLYLWLHV (PHUVKDZ)GDW ,QVWHDG ,QWHJUDWHG GRPLQDWHG DQGRU RYHUVDZ DOO /($WKHQOHDVHGWKHHTXLSPHQWEDFNWR&,6IRUPRQWKO\ HVVHQWLDO DFWLYLWLHV $OWKRXJK 0U sXQJ WHVWLILHG WKDW UHQWDOSD\PHQWVHTXDOWRWKHPRQWKO\SD\PHQWV/($RZHGRQ ,&&jV RIILFHUV DQG GLUHFWRUV FRQWUROOHG WKH GD\WRGD\ RSHUDWLRQV RI ,&& KH GLG QRW LGHQWLI\ DQ\ RI WKH 3OHGJHUHWDOY8QLWHG6WDWHV 1RV 1RV 3OHGJHUHWDOY8QLWHG6WDWHV
JXDUDQWHHVE\WKHSDUHQWIRUWKHEHQHILWRIWKHVXEVLGLDU\DQG LWVQRWHWR3URJUDP$GGLWLRQDOO\&,6jVUHQWDOSD\PHQWVWR ZKHWKHUWKHVXEVLGLDU\XVHVWKHSURSHUW\RIWKHSDUHQWDV /($ ZHUH JXDUDQWHHG E\ &,6jV SDUHQW &RQWLQHQWDO LILWZHUHLWVRZQl6WHUOLQJ)5'DWFLWLQJ:P ,QIRUPDWLRQ6\VWHPVm&RQWLQHQWDOl$OOSD\PHQWVRQWKH 3DVVDODFTXD%XLOGHUV,QFY5HVQLFN'HYHORSHUV6,QF OHDVHDQGYDULRXVQRWHVZHUHPDGHE\RIIVHWWLQJERRNNHHSLQJ )GG&LU DQDO\]LQJ1HZ
,QUHYLHZLQJWKH3OHGJHUVjFODLPLQWKLVFDVHZHEHOLHYH ,&&jV LQLWLDO FDSLWDOL]DWLRQ LQFOXGHG RQO\ LQ DQGWKHSDUWLHVDJUHHWKDWLI,&&ZHUHDPHUHLQVWUXPHQWDOLW\ FDVKIURP,QWHJUDWHGjVSXUFKDVHRIDOOLWVFRPPRQVWRFN RI ,QWHJUDWHG DV LV DUJXHG E\ WKH ,56 WKHQ WKLV FDVH LV DQG D GHPDQG SURPLVVRU\ QRWH IURP GLVWLQJXLVKDEOHIURP(PHUVKDZLQRQHLPSRUWDQWUHVSHFW,Q ,QWHJUDWHG (PHUVKDZLI&,6ZKRRZHGSD\PHQWVWR/($DQGWKXVWKH (PHUVKDZVEHFDPHLQVROYHQWDQGWKHJXDUDQWRU&RQWLQHQWDO 3ODLQWLII6WHSKHQ3OHGJHU>j@VSD\PHQWVRILQWHUHVWRQ DOVR ZHQW EDQNUXSW RU UHIXVHG WR KRQRU LWV JXDUDQW\ /($ WKH,&&QRWHVZHUHXOWLPDWHO\UHFHLYHGE\,QWHJUDWHGQRW ZRXOGVWLOOKDYHWRPDNHLWVSD\PHQWVWR3URJUDPXQGHUWKH ,&& $W OHDVW IRXU RI 3ODLQWLIIjV LQVWDOOPHQW DQGRU LQVWDOOPHQWQRWHWKHUHE\PDNLQJWKH(PHUVKDZVSDUWQHUVRI LQWHUHVWSD\PHQWVRQWKH,&&QRWHZHUHPDGHSD\DEOH /($ SHUVRQDOO\ OLDEOH WR 3URJUDP IRU WKH SD\PHQWV /($ GLUHFWO\WR,QWHJUDWHG2WKHUSD\PHQWVZHUHPDGHSD\DEOH RZHGWR3URJUDP WR6DWHOOLWH(TXLSPHQW7UXVW$>Q@RW,&&DQGVHQWFR ,QWHJUDWHG$OOSD\PHQWVZHUHVHQWWR,QWHJUDWHGjVSODFH ,Q WKH 3OHGJHUVj FDVH KRZHYHU LI ,&& ZHUH D PHUH RI EXVLQHVV ,&& LV QRW LGHQWLILHG DQ\ZKHUH RQ WKH LQVWUXPHQWDOLW\ RI LWV SDUHQW ,QWHJUDWHG WKHQ ,QWHJUDWHG FKHFNVRUWKHELOOLQJVWDWHPHQWV,QDGGLWLRQ,QWHJUDWHG 3OHGJHUHWDOY8QLWHG6WDWHV 1RV 1RV 3OHGJHUHWDOY8QLWHG6WDWHV
ZKLFK JXDUDQWHHG WKH SD\PHQWV WKDW ,(/& ZDV UHTXLUHG WR WKHHYLGHQFHWKHIDFWILQGHUjVFKRLFHEHWZHHQWKHPFDQQRWEH PDNHWRWKH7UXVWRIZKLFK3OHGJHUZDVDQLQYHVWRUZRXOG FOHDUO\HUURQHRXVl$QGHUVRQ86DW DOVREHWKHSD\HHRI3OHGJHUjVQRWHXQGHUZKLFK3OHGJHUZDV UHTXLUHGWRPDNHSD\PHQWVWR,&&ZKLFKKDGDQREOLJDWLRQ ,QWKLVFDVHWKH7UXVWGRFXPHQWVUHTXLUHWKDWZHORRNWR WR ,(/& ,Q RWKHU ZRUGV LI ,(/& IDLOHG WR PHHW LWV UHQWDO 1HZZ@KHUHWKHUHDUHWZRSHUPLVVLEOHYLHZVRI WKH DOOHJHGO\ GRPLQDWHG FRUSRUDWLRQ LV WUHDWHG DV DQ LQGHSHQGHQW SURILW FHQWHU WKH SD\PHQW RI GHEWV DQG