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<p class="tombstones">
<font color="#058063"><b>Financing Challenge:</b></font><br>
<img style="margin: 0px 5px 5px -10px;" src="consumer.gif" width="164" height="129" hspace="0" vspace="0" border="0" align="left">A $40 million distributor of consumer products was presented with two unique opportunities that would significantly increase sales and profitability.</p>

<p class="tombstones">The first opportunity involved becoming a licensee of one of the world's largest Licensors that has some of the best known cartoon characters in its portfolio.  The Licensor required a large advanced royalty payment upon execution of the Licensing Agreement.</p>

<p class="tombstones">The second opportunity involved purchasing the assets of a company that was in Chapter 11 Bankruptcy.  These assets included inventory, trademarks and other intangible assets.  The company in bankruptcy was in a different niche of the same industry as the Company.  This asset purchase offered the Company economies of scale, access to new product lines and new customers and the potential to sell its existing products to new customers.</p>

<p class="tombstones">The Company had a revolving line of credit collateralized by receivables and inventory.  The Company was highly leveraged with a debt to equity ratio of 6:1.  The Company's existing lender was unwilling to provide additional financing for the advanced royalty payment and the purchase of assets from the Bankruptcy Court as there would be no additional collateral to support the additional loan.</p>

<p class="tombstones">The Company attempted to acquire financing on its own and through intermediaries, but was unsuccessful.</p>

<p class="tombstones">The Company was referred to Asset Enhancement Solutions, LLC for assistance.</p>


<p class="tombstones"><font color="#058063"><b>Creative Financing Solution:</b></font><br>Asset Enhancement Solutions, LLC "AES" arranged a $3,000,000 Mezzanine Loan with a financial institution that allowed the Company to take advantage of both growth opportunities.</p>

<p class="tombstones">This loan was structured as a Junior Secured Note ("Mezzanine Loan") that was subordinate to the Company's senior debt. This Mezzanine Loan had a second lien security interest in the assets of the company behind the senior secured lender.  The Company's other outstanding debt was subordinated to this Mezzanine Loan.  The Company's historical and projected cash flow from operations helped justify this Mezzanine Loan.</p>

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<p><font color="#058063"><b>Contact</b></font><br>Neil Seiden, 516-767-0100<br><a href="mailto:[email protected]">[email protected]</a>
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