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Global Asset Development Group

Global Asset Development Group

A Green Business That is Sustainable and Profitable

Verify Investor Status to make a reservation

Deal Type

Convertible Note

Funding Goal

$2,000,000

Current Reservations

$0

Minimum Reservation

$2,500

Deal Stage

Seed

Interest (% per year)

10.00%

Term Length (Months)

36 months

Valuation Cap

$2

Conversion Discount (%)

N/A

Warrant Coverage (%)

10%

Open Date

09/05/2018

Maximum Reservation

$5,000,000

Closing Date

02/15/2019

Elevator Pitch

GADG is satisfying America's need for raw materials and tapping into Africa's largely unfulfilled 81 million replacement parts market by cheaply acquiring and efficiently eliminating old cars.

Company Overview

Global Asset Development Group has used its team member expertise in auto reclamation, syndicated loan financing and Africa to create a business that satisfies the current need domestically for the building materials needed for the pending $1.5 trillion infrastructure plan and replacement parts for the 81 million cars in Africa.

This business is unique because it will break a vehicle completely down with no pollution. Everything from fluids, Freon, as well as ferrous and non ferrous metals will be extracted and recycled as materials or left in tact and sold as parts abroad.


Pitch Deck

Risks & Disclosures

RISK FACTORS

The purchase of Units entails certain risks that Investors should consider before making a decision to purchase the Units. The Interests may not be suitable for certain investors. The Interests may not be a suitable investment for you. Prospective investors are encouraged to meet with and obtain more information regarding the Interests from representatives of the Company, who will make available such information for prospective investors. In addition, prospective investors should consult with their own financial, legal and tax advisors prior to investing in the Company. The characteristics of the Interests, including lack of liquidity, may not satisfy your investment objectives. The Interests may not be a suitable investment for you based on your ability to withstand a loss of profit or principal or other aspects of your financial situation, including your income, net worth, financial needs, investment risk profile, return objectives, investment experience, and other factors. Prior to purchasing any Notes, you should consider your investment allocation with respect to the amount of your contemplated investment in the Interests in relation to your other investment holdings and the diversity of those holdings. Each investor will be required to represent to the Company as to such investor’s qualifications to invest in the Interests and to acknowledge that such investor has had the opportunity to ask questions and receive information sufficient to support its investment decision. Each investor also will be required to represent that it is able to bear the risk of loss of all its investment. The Company will rely upon the truth and accuracy of these representations.

There can be no assurance that any rate of return or other investment objectives will be realized or that there will be any return of capital. Prospective Investors should consider the following factors among others in making their investment decision.

Risks Related to Our Business

Our Company has limited operating history and was recently formed.

The Company is newly formed, and therefore, has a limited operating history. There is no assurance that the Company will operate profitability or that your investment in whole or in part will be returned. The Company is subject to all the risks inherent in the establishment of a new business venture. The likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications, uncertainties, and delays frequently encountered in the formation of any new business. Global Asset Development Group, Inc. was established in 2015 and has been focused on raising capital and developing its concepts. Because the company is new, with limited operating history, there is no assurance that Global Asset Development Group, Inc. will realize earnings from operations or net profits in the future.

Our products have yet to be commercialized.

There is no way to predict all of the risks associated with this unique venture. The Company may not generate sufficient sales proceeds to pay all of its research, development, marketing, manufacturing and operating expenses, taxes, and debt service requirements. There is no assurance that we will generate any cash flow.

Our products may not achieve broad market acceptance or be commercially successful.

We expect that sales of our inventory will account for a large part of our revenues for at least the next several years. The products we intend to develop may not gain broad market acceptance unless we are able to convince the three levels of buyers of the benefits. Moreover, even if private (retail), commercial and wholesale buyers understand the benefits of any of our products, they still may elect not to use our products for a variety of reasons.

We have limited internal manufacturing resources, and if we are unable to provide an adequate supply of our products, our growth could be limited, and our business could be harmed.

Final disassembly of many of our product components is expected to occur at our facility. If our facility experiences a disruption or if we are unable to make our mortgage payments, we would have an extremely limited means of providing those automotive components until we are able to restore the manufacturing capability at our current facility or develop the same capability at an alternative facility.

In connection with the commercialization of our products, we expect that we will need to increase, or “scale up,” the production process of our components over the anticipated initial level of production. While we have taken steps in anticipation of growth, companies often encounter difficulties in scaling up production, such as problems involving yields, quality control and assurance, and shortages of qualified personnel. If the scaled-up production process is not efficient or produces an end product that does not meet quality and other standards, we may be unable to meet market demand and our revenues, business, and financial prospects would be adversely affected.

Our future success depends on our ability to obtain regulatory clearances or licensing to distribute our products. We cannot be certain that we will be able to do so in a timely fashion, or at all.

We do not currently have the necessary regulatory clearances or approvals in any county in the greater Atlanta Area. Without clearances or approvals, we cannot sell or market automotive parts. To obtain licensing for clearance or approval, we must first receive premarket clearance from the state of Georgia.

The licensing process generally takes three to twelve months from submission. The process of obtaining land approval could be much more costly and uncertain.

If the third parties on which we may need to rely to conduct any market development to assist us with presales due diligence do not perform as contractually required or expected, we may not be able to obtain the property at our negotiated rate or could irrevocably preclude us from purchasing the property at any price.

We do not have the independent ability to gather due diligence on these properties once they scale into the thousands. To that extent, we will need to rely on real estate professionals to perform these actions. If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if these third-parties need to be replaced, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols or regulatory requirements or for other reasons, our planned activities may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory clearance or approval for a project. As such, our business, operating results, and prospects may be adversely affected. Furthermore, our third-party investigators may be delayed in conducting our due diligence for reasons outside of their control.

The results of our recycling process may not support the initial product claims or any additional claims we may seek for our products and may result in the discovery of unforeseen issues.

Even if with testing we need to undertake is completed as planned, we cannot be certain that its results will support the products original claims or any new indications that we may seek for our products or governing authorities will agree with our conclusions regarding the results of those trials. The product testing process may fail to demonstrate that our products or a product candidate are effective replaces for the proposed indicated use.

We may not be able to operate if there are certain changed events.

Unexpected negative events concerning either the intellectual property, product to be developed, or the economy, in general, could alter investment conditions to the extent that dilution of existing investors is required in order to raise the necessary capital. While the officers have the right to loan additional capital to the Company, the officers may not be in a position to do so. In such event, there can be no assurance that the current management team would remain in place or that the Company’s business plan would not materially change as a result of a shift in control.

Any adverse change in general economic conditions, significant price increases, or adverse occurrences affecting our industry, could have a material adverse effect on us and the results of our operations.

Our Managers may allocate their time to other businesses thereby causing conflicts of interest in its determination as to how much time to devote to the Company’s affairs.

The Managers may be engaged in other business endeavors and are not obligated to contribute any specific number of hours per week to the Company’s affairs. If the other business affairs of our Managers require them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to the affairs of the Company, which could have a negative impact on our ability to operate efficiently.

Necessity for Additional Financing

The Company requires the proceeds from this Offering to continue operations. Management believes that the net proceeds from the Maximum Offering together with a loan syndication and the operating revenues will satisfy the Company’s operating cash requirements for approximately seven (7) years and that the net proceeds from the Minimum Offering together with a loan syndication and operating revenues will satisfy the Company’s operating cash requirements for approximately two (2) years. However, no assurance can be given that the additional working capital will not be required. That additional financing can be obtained on terms satisfactory to the Company, if at all. Any such financing may result in possible dilution of the Company’s existing shareholders should the Company issue shares or convert its notes into shares. The Company has not sought to borrow funds from commercial sources, and there can be no assurance that the Company will be able to borrow or otherwise obtain funds from commercial or other sources.

Investors will experience immediate and substantial dilution in their investment.

Investors in this offering will experience an immediate and substantial dilution in book

value per share of the shares acquired during the warrants portion after this offering. Dilution in net tangible book value per share represents the difference between the amount per share paid by investors for shares in this offering and the pro forma net tangible book value per share of our shares immediately following this offering. The dilution experienced by investors in this offering will result in a net tangible book value per share less than the offering price per share. This dilution may depress the value of our shares and make it more difficult to recover the value of your investment in the event you are able to sell the shares in the future.

Risk Inherent in Operations

The Company is subject to all risks inherent in a small company seeking to develop, introduce, market and distribute new products. The likelihood of the Company’s success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the development, introduction, marketing, and distribution of new products in a competitive environment. Risks of African development are tied to the political stability and creditworthiness of the country, both of which could change without warning.

Reliance Upon Key Personnel

The Company is largely dependent upon the personal efforts and abilities of its executive staff. The loss or unavailability of the services of them it this time may have a materially adverse effect on the Company. Each has a written employment agreement with the Company, which provides for an employment term commenced on April 16, 2016, specifying a salary, benefits, and other remuneration and contains his respective job description. See “Management”. The Company is contemplating employment agreements for the other key members of management: however, there can be no assurance that the Company will enter into such agreements or that terms will be agreed upon. The Company does not have key- man life insurance on the lives of Jay Hicks, Timothy Williams, or John Stevens there are plans to purchase this coverage. Once the Company decides to purchase this insurance, the can be no assurance that Jay Hicks, Timothy Williams, or John Stevens will qualify for such insurance or, if they do, that such insurance will be available at affordable rates or, if purchased such insurance will adequately compensate the Company for the loss of their respective services.

Responsibilities by Existing Management

Upon completion of this Offering, assuming completion of the Minimum Offering, the management team will use “best efforts, minimum/maximum basis” for the day to day operation of the company.

Competition

Although we believe that our products and services will compete favorably in our market segments, we may not maintain a competitive portion against current and potential competitors and market acceptance for our products and services has not yet been demonstrated. Many of the current and potential competitors have longer operating histories, greater name recognition, larger installed bases, and significantly greater financial, technical, marketing, and sales resources than we do. As a result, competitors may be able to react more quickly to emerging technologies and changes in customer requirements or to devote greater resources to the promotion and sale of their products. In addition, certain of our current competitors may broaden or enhance their offerings to provide a more comprehensive solution competing more effectively with our products and services. See “Business-Competition”

Arbitrary Offering Price

There is no present public trading market for the Company’s Common Stock and the price at which the Units are being offered bears no relationship to conventional criteria such as book value or earnings per note. The Company has determined the offering price based primarily on the projected operating results and our ability to repay. There can be no assurance that the offering price bears any relation to the current fair market value of the notes in the Issuance.

Doing Business in Africa

Africa deals with many of the same problems that have habitually plagued the developing world. The infrastructure, although built to developed world standards in some areas such as South Africa, is largely undeveloped and incapable of supporting large-scale business growth without substantial outside investment. The population in most countries still deals with widespread poverty. Corruption and bribery are still accepted parts of how business is conducted throughout the continent, leaving it up to the business to determine and enforce its own moral.

Some specific risks in doing business in Africa

Bureaucracy contributes greatly to the risks of doing business in Africa. There are many time-consuming processes that are involved in imports, exports, foreign currency repatriation, tax payments, land acquisition and application of permits. The political and economic stability of African countries can vary greatly during elections and worldwide economic events. And while armed conflict is not present in all regime changes, the chances of it happening has to be considered.

Our Executive Team and its Manager have broad discretion over the use of proceeds from the offering.

We expect to use the proceeds from the offering to invest in our projects, concepts, and investments and for other general corporate purposes, which may include the payment of general and administrative expenses. Our Executive Team will have broad discretion in determining how the proceeds of the offering will be used. You could lose your entire investment if our Executive Team invests our funds in unsuccessful initiatives.

The Note Holders will have limited rights.

Note Holders will be unable to exercise any management functions with respect to the Company. The rights and obligations of the Note Holders are governed by the provisions of the Subscription Agreement. Further, the Executive Team may only be removed for cause by the affirmative vote of Note Holders holding 75% of the interests, provided that the Executive Team shall not be removed except for breach of fiduciary duty, willful or wanton misconduct or gross negligence, and subject to the return and cancellation of any guaranties provided to creditors of the Company by the Executive Team or any of the Executive Team’s Manager. As such, Note Holders will have limited rights to remove the Executive Team.

Payment of fees or distributions to our Executive Team will reduce cash available for investment, distributions to Note Holders, and the repurchase of any Interests held by Note Holders, increasing the risk that you will not be able to recover the amount of your investment.

Our Executive Team will perform services for us in connection with the selection, acquisition, and administration of our investments. Our Executive Team could be paid substantial distributions. Our Executive Team could be paid substantial fees for their services. The payment of fees or distributions will reduce the amount of cash available for investment, distributions to Note Holders and the repurchase of Interests held by Note Holders.

Investment Delays

There will be a delay between the time Interests are sold and the time purchasers of Interests are admitted to the Company and begin to participate in the investment yield being realized by the Company on its Investments portfolio. During the period, proceeds from the sale of Interests will be invested in short term certificates of deposit, money market funds or other liquid assets which will not yield a return as high as the anticipated return to being earned by the Company. This delay, which is anticipated to be less than 90 days in most cases, will dilute the overall investment return to Note Holders.

We may not meet the minimum offering requirements for this offering; therefore, investors may not have access to their funds for one year from the date of this prospectus.

If the minimum offering requirement of $1,000,000 is not met within one year from the date of this prospectus, this offering will terminate and subscribers who have delivered their funds into escrow will not have access to those funds until such time. In addition, subscribers may not receive any interest on their invested funds delivered into escrow.

Size of the Offering

There is no assurance that the Company will obtain capital contributions equal to the maximum amount of the offering. Receipt of capital contributions of less than the maximum amount will reduce the ability of the Company to spread investment risks through diversification of its investment portfolio; however, in the opinion of the Executive Team, there will be no other material limitation on the Company’s operation if less than the maximum proceeds are raised.

We are not and do not plan to be registered as an investment company under the Investment Company Act, and therefore we will not be subject to the requirements imposed by the Investment Company Act; maintaining an exemption from registration may limit or otherwise affect our investment choices.

Neither we nor any of our future subsidiaries are registered or intend to register as an investment company under the Investment Company Act. If we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things:

Limitations on capital structure;

Restrictions on specified investments;

Prohibitions on transactions with affiliates; and

Compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase its operating expenses.

We expect that we and any of our future subsidiaries will rely on the exception from the definition of an investment company under Section 3c(1) of the Investment Company Act, which is available for entities whose “outstanding securities (other than short-term paper) are beneficially owned by not more than one hundred persons and which is not making and does not presently propose to make a public offering of its securities.” Until such time we have 100 investors, we will rely on the exemption available under Section 3(c)(1). Thereafter, we may find it necessary to register under the Investment Company Act of 1940.

Indemnification Obligations

The Company is obligated to indemnify the Executive Team and its affiliates and agents against certain civil liabilities, guaranties provided to creditors of the Company by the Executive Team or its Manager, including Jay Hicks and Timothy Williams and certain other potential liabilities. If the Company was required to indemnify the Executive Team or such other parties, the Company would have to expend the Company capital, thereby reducing the number of funds available for use in the Company to invest or to distribute to the Note Holders.

Our rights and the rights of the Note Holders to recover claims against our Executive Team, its Manager and employees are limited, which could reduce any recovery against them if they negligently cause us or the Note Holders losses.

Our Subscription Agreement generally provides that our Executive Team, nor its Manager, will be liable to us or to Note Holders for monetary damages and we must generally indemnify our Executive Team and its Manager, unless, they are grossly negligent or engage in willful misconduct. We and the Note Holders may have more limited rights against our Executive Team and its Manager and employees than might otherwise exist under common law, which could reduce recovery by us or the Note Holders from these persons if they act in a negligent manner. In addition, we may be obligated to fund the defense costs incurred by our Executive Team, its Manager in some cases, which would decrease the cash otherwise available to pay distributions to Note Holders or to repurchase Limited Partner Interests.

The Executive Team has only a nominal net worth.

The Executive Team is nominally capitalized. Although such entity is generally liable for the debts of the Company, it is not anticipated to have the ability to contribute additional funds should the need arise. Accordingly, Note Holders must rely solely upon the operating results of the Company and the Company Investments for the success of their individual investments.

Projections are speculative and are based upon a number of assumptions.

Any projected financial results prepared by the Company have not been independently reviewed, analyzed, or otherwise passed upon. Such “forward-looking” statements are based on various assumptions of the Company, which assumptions may prove to be incorrect. Accordingly, there can be no assurance that such projections, assumptions, and statements will accurately predict future events or actual performance. Any projections of cash flow and all other materials or documents supplied by the Executive Team should be considered speculative and are qualified in their entirety by the assumptions, information, and risks disclosed in this Offering. Investors are advised to consult with their own independent tax and business advisors concerning the validity and reasonableness of the factual, accounting and tax assumptions. No representations or warranties whatsoever are made by the Executive Team, its affiliates or any other person or entity as to the future profitability of the Interests or the results of making an investment in the Interests.

No Guarantee of Distributions

Note Holders may not receive any cash distributions. Further, the Note Holders may be allocated profits, resulting in taxable income to such Partners, but not receive any distributions from the Company to pay such taxes.

Risks Related to Our Business

We remind you that there are substantial risk factors relating to our business generally. Our business, operating results and financial condition could be adversely affected by any of the following specific risks. In addition to the risks described below, we may encounter risks that are not currently known to us or that we currently deem immaterial, which may also impair our business operations.

Negative publicity associated with litigation, governmental investigations, regulatory actions, and other public statements could damage our reputation or one of our Portfolio Company’s reputations.

From time to time there are negative news stories about Africa and the real estate and financial industries. Such stories may follow the announcements of litigation or regulatory actions involving us or others in our industry. Negative publicity about our alleged or actual practices or about our industry generally could adversely affect our business operations or those of our Portfolio Companies.

Internal Revenue Service challenge

The Internal Revenue Service may challenge the characterization of material tax aspects of your investment in the Interests. You should seek the advice of a qualified tax advisor prior to investing in our Interests.

The IRS may determine that allocations made in the manner described in the Company Agreement are not appropriate and reallocate in a manner detrimental to individual partners or the Company.

The Company will allocate among their Note Holder their allocable repayment in accordance with the terms of their respective Subscription and Promissory Note agreements. For such allocations to be recognized for tax purposes, such allocations must have a “substantial economic effect”. No assurance can be given that the IRS will not claim that the allocations under each Agreement lack substantial economic effect. The analysis of whether the IRS might be successful in such a claim requires review of both Agreements, the Internal Revenue Code (the “Code”), and the Treasury Regulations promulgated under the Code. Each potential investor should obtain independent tax advice regarding this issue. If the IRS is successful in a challenge to the allocations intended to be made to Note Holders under the Subscription Agreement, the tax treatment of the investment for the Note Holders may be adversely affected.

We may be audited, which could subject you to additional tax, interest, and penalties.

Our federal income tax returns may be audited by the Internal Revenue Service. Any audit of us could result in an audit of your tax return. The results of any such audit may require adjustments of items unrelated to your investment in us, in addition to adjustments to various partnership items. In the event of any such audit or adjustments, you might incur attorneys’ fees, court costs and other expenses in contesting deficiencies asserted by the Internal Revenue Service. You may also be liable for interest on any underpayment and penalties from the date your tax was originally due. The tax treatment of all partnership items will generally be determined at the partnership level in a single proceeding rather than in separate proceedings with each partner, and our Executive Team is primarily responsible for contesting federal income tax adjustments proposed by the Internal Revenue Service. In such a contest, our Executive Team may choose to extend the statute of limitations as to all stakeholders and, in certain circumstances, may bind the Note Holders to a settlement with the Internal Revenue Service. Our Executive Team will have the discretion in such circumstances either to pass along any such adjustments to the Note Holders or to bear such adjustments at the corporate level.

Unrelated Business Taxable Income (UBTI)

Employee benefit plans and most organizations exempt from federal income taxes (“Exempt Organizations”), including IRAs and other similar retirement plans, are subject to tax to the extent that their unrelated business taxable income (“UBTI”) exceeds $1,000.00 during any tax year. To the extent that an Exempt Organization is allocated UBTI from the Company it would be subject to tax on such amounts exceeding $1,000 at the trust tax rates. UBTI generally means the gross income derived from any unrelated trade or business regularly carried on by the exempt organization, less the deductions directly connected with carrying on the trade or business. Certain types of income (and deductions directly connected with the income) are generally excluded when figuring UBTI. The fact that UBTI will be generated and allocated to the Company (and ultimately the investors) may make an investment in the Company less desirable for an Exempt Organization. Exempt Organizations should consult their own tax counsel regarding the possible consequences of an investment in the Company. For certain other tax-exempt entities — charitable remainder trusts and charitable remainder unitrusts (as defined in Section 664 of the Code) — the receipt of any UBTI may have extremely adverse tax consequences, in that it could result in all of its income from all sources for that year being taxable.

Foreign investors may be subject to FIRPTA on the sale of our Interests.

We are not a tax advisor and are not knowledgeable about the Internal Revenue Code as it relates to FIRPTA. We urge investors to consult with their tax advisors with respect to FIRPTA and its potential effect on an investment in our Interests.

You may realize taxable income without cash distributions, and you may have to use funds from other sources to fund tax liabilities.

As a Note Holder of the Company, you will be required to report your allocable share of our taxable income on your personal income tax return regardless of whether you have received any cash distributions from us. It is possible that your Interests will be allocated taxable income in excess of your cash distributions. We cannot assure you that cash flow will be available for distribution in any year. As a result, you may have to use funds from other sources to pay your tax liability.

We could be characterized as a publicly traded partnership, which would have an adverse tax effect on you.

If the Internal Revenue Service were to classify us differently, we could be taxable as a different corporation, and distributions made to you could be treated as portfolio income to you rather than passive income. We cannot assure you that the Internal Revenue Service will not challenge any conclusion or that we will not, at some time in the future, be treated as a different class of corporation due to the following factors:

  • the complex nature of the Internal Revenue Service safe harbors;
  • the lack of interpretive guidance with respect to such provisions; and
  • the fact that any determination in this regard will necessarily be based upon facts that have not yet occurred.

State and local taxes and a requirement to withhold state taxes may apply, and if so, the amount of net cash from open payable to you would be reduced.

The state in which you reside may impose an income tax upon your share of our taxable income. Further, states in which we will own Properties may impose income taxes upon your share of our taxable income allocable to any partnership property located in that state. Many states have implemented or are implementing programs to require corporations to withhold and pay state income taxes owed by non-resident partners relating to income-producing properties located in their states, and we may be required to withhold state taxes reducing our profits. In the event we are required to withhold state taxes from any cash distributions, the amount of the net cash from operations otherwise payable to you would be reduced. In addition, such collection and filing requirements at the state level may result in increases in our administrative expenses that would have the effect of reducing cash available for distribution to you. You are urged to consult with your own tax advisors with respect to the impact of applicable state and local taxes and state tax withholding requirements on an investment in our Interests.

Legislative or regulatory action could adversely affect investors.

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an investment in our Interests. Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect your taxation as a Note Holder. Any such changes could have an adverse effect on an investment in our Interests or on the market value or the resale potential of our properties. You are urged to consult with your own tax advisor with respect to the impact of recent legislation on your investment in Interests and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our Interests.

No Independent Counsel

No independent counsel has been retained to represent the interests of the Note Holders. The interests of Holders may be inconsistent in some respects with the interests of the Company and the Executive Team. Each prospective Note Holder is therefore encouraged and urged to consult his, her or its own counsel as to the terms and provisions of the Interests and in all other documents related thereto.

No Independent Management

The collaboration will not have independent management and it will rely upon the Executive Team for the operation of the Company. The Executive Team will devote only so much time to the business of the Company as is reasonably required. The Executive Team will have conflicts of interest in allocating management time, services and functions between its existing business interests other than the Company and any future partnerships which it may organize as well as other business ventures in which it may be involved. The Executive Team believes it has sufficient staff available to be fully capable of discharging its responsibilities to all such entities.

The Executive Team and employees of the Executive Team and its affiliates will face conflicts of interest relating to time management and allocation of resources, and our results of operations may suffer as a result of these conflicts of interest.

Affiliates of the Executive Team are active in other investment programs that may have investment objectives similar to ours or to which they have legal and fiduciary obligations similar to those they owe to us and our Note Holders. Because affiliates of the Executive Team have interests in investment programs and also engage in other business activities, they may have conflicts of interest in allocating their time and resources between our business and these other activities. During times of intense activity in other programs and ventures, they may devote less time and resources to our business than is necessary or appropriate. If the Executive Team, for any reason, is not able to provide sufficient resources to manage our business due to the other activities of its affiliates, our business will suffer as we have no other personnel to perform these services. Likewise, if the Executive Team or its affiliates suffer financial and/or operational problems as a result of any of the activities of its affiliates, whether or not related to our business, and the Executive Team is unable to manage our business, we will have no one to manage or dispose of our investments. Conflicts with our business and interests are most likely to arise from involvement in activities related to:

  • the allocation of new investments among us and affiliates of the Executive Team;
  • the allocation of time and resources among us and affiliates of the Executive Team;
  • the timing and terms of the investment in or sale of an asset;
  • entitlement or management of our properties by affiliates of the Executive Team;
  • investments with and/or sales to and acquisitions from affiliates of the Executive Team; and
  • compensation to the Executive Team.

Cyclical Nature of Property Markets

Property markets are influenced by supply and demand factors that are intrinsic (such as the demand for offices and the availability of land for development for such offices) as well as extrinsic factors that relate to the broader economy (such as the general economic cycle and the availability and price of capital). Many of these factors are beyond the Company’s ability to accurately predict or directly control. These various factors have historically caused property markets to go through cycles during which prices have fluctuated up and down. Negative economic conditions may have a material adverse effect on the Company’s ability to achieve positive financial returns.

Possible Adverse Economic Conditions and Geographical Risk

The financial operations of the Company may be affected by general economic conditions, by conditions within the country in which the investments are made, or by the particular financial condition of the parties conducting business with the Company. The Company is seeking to acquire income earning; developed assets in sub-Saharan Africa and the success of the Company in achieving its objectives will be materially affected by the political and economic climate in sub-Saharan African countries. In particular, changes in the gross domestic product, employment trends, and rates of inflation, tax, and interest may affect the market value for real estate and therefore the Company’s value or the value of the underlying assets held by the Company. Any future or prolonged recession in sub-Saharan Africa could materially adversely affect the value of the Company’s assets.

Valuations

The valuation of the Group may fluctuate significantly due to a number of factors, many of which are beyond the directors’ control, including:

• Changes in land and property values due to market forces.

• Changes in property market prices.

• Variations in operating results of the Fund’s Investment Assets.

• Changes in interest rates and/or the liquidity available from the banking sector.

DILUTION

The “net tangible book value per share” of the shares represents the total amount of

tangible assets of the Company, less the total amount of liabilities of the Company, divided by

the number of shares of the Company outstanding.

Dilution is the difference (if any) between (i) the purchase price per share of the shares

offered over (ii) the net tangible book value per share (determined on a pro forma basis) adjusted

to reflect completion of the offering.

This offering is not issuing shares. As part of the warrants program, it will be offering a pool of Preferred Shares to its Note Holders after repayment of this offering. Shares and share prices will fluctuate according to our syndication loan, mergers &acquisitions and structuring strategy

Documents

Confidential

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