Description of Portfolio Company
S3 Investment Company's wholly-owned portfolio investment, Redwood Capital, Inc., assists private Chinese companies in accessing U.S. capital markets utilizing an existing network of investment banking relationships. Redwood Capital relies on a highly experienced investment and corporate management team focused on the emerging presence of Chinese corporations in the global capital markets.
China's rapid economic growth and increasingly global reach demand large amounts of private capital, and, unfortunately, experience with western investment banking practices is limited in Chinese corporations. Redwood Capital bridges this gap between Chinese capital needs and American public markets and assists Chinese low-tech and high-tech companies who wish to enter the U.S. market with rapid access to public capital markets.
Redwood Capital assists with the preparation of offering materials, public and investor relations, and SEC filings, assisting the client to become eligible for a Nasdaq/NYSE/AMEX listing and underwriting activities in the U.S. markets. In exchange for its involvement in the client's entrance into the U.S. financial markets, Redwood Capital receives a combination of fees and equity in the new U.S. company.
Redwood Capital's first client, Dalian Fushi Bimetallic Manufacturing Company, Ltd., has completed its reverse merger and is currently trading in the U.S. public markets.
Summary of Redwood Capital Investment
- Equity Position: 100%
- Expected Return to S3 Shareholders:
- Repayment of $500,000 line of credit, plus interest
- Value of ongoing 100% equity position in revenue payments back to S3
- Capital appreciation of S3 stock as portfolio value of Redwood Capital increases