5 Questions with Tracy Weslosky - August 2007
Our August Edition of 5 Questions speaks with Tracy Weslosky of Weslosky & Cowans Ltd. otherwise known as WESCOW.
1. WESCOW is a Limited Market Dealer in Ontario specializing in Investment Banking. For our readers what is a Limited Market Dealer?
There are four main categories of dealer registration under the Ontario Securities Act. They are:
- Broker
- Investment Dealer
- Mutual Fund Dealer
- Limited Market Dealer
A Limited Market Dealer is a person or firm who trades solely in "exempt" securities. Exempt securities are generally private placement financings that rely on registration and prospectus exemptions under the Securities Act (Ontario).
Weslosky & Cowans Ltd. or "WESCOW" as we often refer to ourselves, has been a Limited Market Dealer in Ontario since 2002. Our name was inspired by my partner Fred Cowans' grandfather's prominent Montreal based firm McDougall & Cowans.
WESCOW is a boutique investment firm that specializes in private equity raises for private and public companies in the Renewable Energy, Natural Resource, Oil & Gas, Technology and the Entertainment industry sectors.
2. What are the advantages and disadvantages of a company going public by means of a reverse take over (RTO)?
RTOs have some advantages over other methods of going public. For example, the time line for completing RTOs is often considerably shorter. A reason for this is that the disclosure material to be filed is reviewed by the stock exchange on which the company is listing, rather than by the securities commissions. In addition, due to prospectus exemptions that apply, shares issued in the RTO are immediately tradeable except for those in escrow. Also, the company acquires a public float immediately, and therefore a public listing, without having to sell shares.
On the negative side, unlike a prospectus offering, RTO transactions are structured as a share exchange or asset purchase in which no money is raised. So any investment must be raised after the RTO is completed. Another disadvantage is that finding a clean shell company without legal or financial liabilities can be difficult, and the accounting and restructuring involved in "cleaning" it can be expensive. So the first step is really to find an acceptable shell company.
3. Your subsidiary, Pro-Edge, is an Investor Relations specialist firm for public companies. What should emerging companies focus on when developing an investor relations program?
To me it's about management -- because I invest in leadership. If management has a track record of success in identifying great deals -- and know how to focus – then things usually get done. My dream clients embrace speed and possess a comfort with strategic risk that brings an interest level to their investor audiences. I call it the "x factor", or the "sizzle" that keeps investors interested
4. What is one of the key requirements for a company to have an effective investor relations program?
Pro-edge is a major advocate of branding. We believe that in order to have interested investors buy the client's stock – they have to remember the stock symbol. Companies must ensure that not only current shareholders but the investment community relates the three or four letters that make up your symbol to your company, your business. By doing this you can increase shareholder value when the markets take interest in your industry.
5. You are starting the filming of a new program called DealFlow. What is the overall concept of the show?
DealFlow is owned by our production company, DealFlow World Inc. It's a gripping television series that captures the drama and sport of global business as seen through the eyes of dealmakers. Targeting high net worth audience and building upon the premium brand recognition associated with wealth around the world, DealFlow offers a firsthand account of how deals get done – behind the scenes and out of the boardroom.
Incidentally, we know that a lot of you reading "5 Questions with..." are dealmakers and investors, and understand this formula. We welcome you to participate in our blog at www.dealflowblog.com as we would love to hear your stories.
DealFlow will be premiering on CNBC and WealthTV in November of 2007
