Working Together

VERITAS DEBT FUNDING

Bluestone has partners with Veritas Group for innovative debt funding

Veritas Debt Funding details

 

  • Veritas will provide 100% funding at an interest rate of 8.5% (fixed) p.a in local currency over a maximum period of 20 years. (No FOREX challenges)

  • Viable & sustainable project on merit but we prefer real estate development ; green projects and purchase of a business. Banks charge 30% deposit.

  • No surety is required.

  • Veritas will take up 51% shareholding in the Company to be funded.

Please note the Veritas term sheet is currently under review and may change in the near future.

send us an email and we will send the updated term sheet

 

The decision to accept a project will take a maximum of two weeks. Once the Funder has indicated that we would like to proceed it will take up to three (3) months before the money is paid over to the Clients account. However, the norm is between 68 and 70 days.

 

Should the Client not be in a position to pay the Administration fees out of own funds, the Client is allowed to obtain bridging finance from a third party, but then it must be so indicated in the budget as this bridging finance needs to be paid off with the first tranche payment received from the Funder.

 

In order for us to make a decision regarding your project, we require the following:

 

  1. Detailed Business Plan

  2. Financial Budgets

  3. Milestones

  4. Due Diligence List of Information

 

Legal due diligence list of information required for Applicants seeking funding 

 

1. Corporate Information 

1.1. CIPC Certificate of Incorporation 

1.2. Memorandum of Incorporation 

1.3. Share register confirming list of shareholders and shares held 

1.4. Copies of share certificates issued to shareholders 

1.5. Tax Clearance Certificate; and Outstanding 

1.6. Financial Intelligence Centre Act, 2001 (FICA) Documents 

1.6.1. Individual. Copy of ID document (SA Citizens) 

1.6.2. Proof of address less than three months old (for example utility bill) 

1.6.3. Bank statement with address 

 

2. Governance Structure 

2.1. Board composition (list of directors, board committees, copies of Identity Documents); and 

2.2. Shareholders Agreement 

 

3. Management Structure 

3.1. Organogram of management (roles & responsibilities) 

3.2. CV’s / Resume 

3.3. Management contracts (restraints of trade / register of interest)

3.4 Company Secretary details and CV and Copy of Identity Document 

 

4. Contractual Obligations 

All agreements to which the company is a party such as those relating to sale and supply of goods and services, leased premises, employment, loans, consultancy, licensing, technology transfer and the like. 

 

5. Regulatory framework 

5.1. Laws and regulations applicable to the business/product or technology; and 

5.2. Regulatory approval (permits, licenses, authorisations certificates and notifications). 

 

6. Pending or threatened litigation 

6.1. Details of any litigation, arbitration, investigations, pending or threatened action by or against the applicant; and 

6.2. Details of all awards, settlement or arrangements

 

7. Auditors Financial Statements (Not required if applicant is newly established entity)

7.1 Audited and Signed Financial Statements for past three years on all companies involved.

Option 1: Asset Instrument: Veritas Shares

With reference to clause 4.9 of the Shareholders Funding Agreement, Veritas undertakes that should it for whatsoever reason be unable to raise the funds required for the project after a period of six months has expired, Veritas will sell those shares and the client will receive a 20% return on investment should the share price remain on $10 / share. Should the share price then either remain constant or should the share price dip below $10 / share, the client will get $12 / share.

However, should the share price rise above the $12 / share the clients return of investment would then be equal to that price that the shares are then sold – for example $14 / share. This means that whatever happens to the share price the client would receive a minimum return of investment of 20% or greater. In this latest scenario the client would earn $4/ share, meaning that the return on investment will be 40%.

For ease of reference we hereby include clauses 4.4 and 4.9 which reads as follows:

“The Parties agree that the payment by the Recipient of the Principal Amount of R0 000 000.00 (_______Million Rand) as per clause 2.2.9 is a prerequisite before any fund sourcing will commence as to enable Veritas to pay such associated costs to compile and finalise the equity bond as to source funds on the global markets. Veritas will within a reasonable time, after confirmation of payment received as per the Principal Amount, issue the Recipient with a share certificate for the number of shares (hereinafter referred to as “Preferred Shares”) so purchased on behalf of the Recipient based at a placement value of US $10.00 per share on the Bermuda Stock Exchange (BSX) under the Veritas listing portfolio with trading symbol VERI.BH. Selling of such shares by the Recipient will be restricted for a period of six (6) months from date of issue of such shares. The Recipient will pay the said Principal Amount to the following special purpose vehicle (SPV) account:

and

4.9 Should Veritas be unable to raise the amount as per clause 4.1 within a period of six months from the date the Preferred Shares had been issued in accordance with clause 4.4, then at the sole discretion of the Recipient (or in the event that the issued shares have been ceded, then the “Holder” of such shares) the Preferred Shares can be Converted into Veritas’s freely tradable Common Shares. Should the share price be below $12.00 per share, then the stock converts based on this Premium conversion of 20% upside formula (A).

(A) = (Invested amount) Divided by (share price) (time 1.2) = (number of shares issued)

 

Option 2: Debt Instrument: Convertible Promissory Note

he convertible note or promissory note is like a cash cheque for the Holder thereof to be paid at a specific date in the future. Therefore should the funds be raised by Veritas , Veritas undertakes to pay the client at the expiry of twelve months from date of issue, as per our example above , the amount of R7million plus 20% return on investment. Thus meaning the client will get R8 400 00.00 from Veritas. Once Veritas has paid the debt plus interest, then the debt instrument becomes null and void.

Should Veritas not be able to raise the project funds within a period of six (6) months, then Veritas will repay the amount of R7 million to the client, but without any interest. Thus meaning that the client will only get R7 million from Veritas.

The similar clause 4.4 to the Shareholders Funding Agreement in respect of the Convertible Promissory Note reads as follows:

“The Parties agree that the payment by the Recipient of the Principal Amount of R7 000 000.00 (Seven Million Rand) is a prerequisite before any fund sourcing will commence as to enable Veritas to pay such broker fees and administration costs as to source funds on the global markets. Veritas will on confirmation of payment received as per the Principal Amount, issue the Recipient with a Convertible Promissory Note as per Annexure “D”, as to repay the Principal Amount to the Recipient or the Holder of such Convertible Promissory Note, twelve months later together with such interest as specified. Notwithstanding the aforesaid, should Veritas not be able to raise the Principal Debt for whatever reason, Veritas hereby undertakes to pay back the Principal Amount, without any interest, to the Recipient after the expiry of six (6) months of the Effective Date, and on such payment the Recipient undertakes to return the said Convertible Promissory Note to Veritas. The Recipient will pay the said Principal Amount to the following account:”

Link to Veritas Convertible Promissory Note template

 

Bluestone Service Group

Cape Town, South Africa

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