Bristol sponsors the recapitalization of companies to provide owners with significant cash liquidity while providing them with a continuing equity stake and participation in the growth of their company. Bristol's services include:

• Structuring the recapitalization in consultation with lawyers and accountants,
  
• Arranging the financing for the payments to be made to the selling shareholder,
  
• Arranging additional financing for the growth of the company,
  
• Advising on and financing acquisitions, and
  
• Structuring and planning the potential future public offering.

As a private company owner who has spent your lifetime building a successful, growing and profitable business, you face many questions, such as: Do you need to diversify your personal net worth? Should you sell your company? Should you raise additional capital and grow your business? Should you go public through an IPO? Should you buy out an inactive shareholder or family member?

Bristol understands the liquidity options facing you as a business owner, such as: (1) selling your company, (2) taking your company public or (3) completing a recapitalization with Bristol.

1. Total Sale of Your Company. Although maximum liquidity may be achieved through an outright sale of your company, a sale will terminate your participation in the future growth of your company. If you sell out, you also will probably give up total management control and may be required to pay capital gains taxes on the sale proceeds as of the time of the sale. Problem - Liquidity but No Continued Ownership.

2. IPO. An IPO can provide you with a strong valuation with a significant retained stake in your company. However, completing an IPO is an expensive process and takes considerable time to complete. After an IPO, it may take a long time to achieve meaningful liquidity as the public markets generally do not look favorably upon insiders selling large amounts of stock. Problem - Continued Ownership but No Liquidity.

3. Recapitalizations - Liquidity and Continued Ownership. A recapitalization involves the sale of 60% to 80% of your company to a partner such as an affiliate of Bristol. In addition to receiving a significant portion of the value of the company in cash at the closing, you will retain substantial equity ownership and continued responsibility for running the company.
Solution - Recapitalizations offer owners of companies the liquidity of an outright sale and the upside potential of continued ownership and operating control of an IPO.

Bristol will arrange the necessary equity capital and other financing to allow the company to continue to grow. Following the recapitalization, the company would still be privately held by you, the operating partner, and Bristol, your financial partner. Together, we will continue to grow the business, with Bristol lending assistance on financial, strategic and acquisition issues. Then, at the appropriate time, the company could go public or sell the business.

Recapitalization Benefits to Owners

• Owner receives a substantial amount of cash.
  
• Owner continues to own a large stake in their company.
  
• Owner participates in growth of the business.
  
• Owner participates in large valuation upon a public offering.
  
• Owner maintains operating control.
  
• Owner obtains financial partner to handle acquisitions, raising growth capital and IPO.

An Example of Recapitalization

Assume that your company is worth $35 million. You want to retain 25% equity ownership going forward because you see good growth prospects for your business and you want to continue running the company. In the recapitalization arranged by Bristol, you will receive $27 million in cash and keep a tax-free 25% ownership position of $8 million in your company. Bristol will arrange financing of $27 million, comprised of $10 million of equity and $17 million of non-recourse debt to the owner, from our relationship equity and banking partners.

Use of Funds
($ millions)

Source of Funds
($ millions)

In this example, the $27 million can be shared equally among all of the current shareholders, pro-rata with their percentage ownership. Alternatively, some owners can cash out entirely, while others can receive a mix of cash and continued ownership.

In contrast to the example above, an outright sale would result in your receiving the full $35 million, but no continuing ownership. Going public, on the other hand, would likely result in raising $20 million for your company (diluting your ownership to 65%), but you would receive little or no cash from the sale of your shares in the IPO.

Personnel

Bristol establishes a team of advisors, industry consultants and financing specialists to best serve the funding requirements of companies. Bristol's contacts among executives are being used to establish and enhance the business connections and opportunities of the client company. In addition, Bristol works with several investment banking firms who assist in the public sale of equity, investment research and market making, when appropriate.

Alan P. Donenfeld is President of Bristol Investment Group, Inc., a member of the National Association of Securities Dealers (NASD) and Securities Investor Protection Corporation (SIPC). Mr. Donenfeld is also President of Bristol Investment Management LLC and General Partner of Bristol Investment Partners L.P. I, a private equity investment partnership. Mr. Donenfeld specializes in structuring investments, particularly recapitalizations, and in raising debt and equity capital. He has assisted on over $2 billion of financing and acquisitions.

Prior to establishing Bristol, Mr. Donenfeld was Vice President in the Merger and Acquisitions Group at Bear, Stearns & Co. Inc. in New York from 1987 to 1990 where he directed numerous acquisitions, valuations, fairness opinions and exclusive sale representation. Prior to working at Bear Stearns, Mr. Donenfeld managed the Principal Investment Group at E.F. Hutton from 1985 to 1987. While at Hutton, he represented the firm in acquiring as principal the Virgin Islands Telephone Company from ITT Corporation. Mr. Donenfeld served on the Board of Directors of VITELCO, which is now a public company under the name Atlantic Tele-Network, Inc.

Prior to joining EF Hutton, Mr. Donenfeld helped establish Quadrex Securities Corporation, where he assisted in raising a leveraged buyout fund which acquired Dansk International Designs, R.P. Martin/Bierbaum, Pacific Brokerage Services, The Polymer Corporation and an equity stake in AirFone Corporation. Also at Quadrex, he represented Citicorp, Equitable Bank and The Marine Corporation in over $200 million of financings.

Mr. Donenfeld started his career at Cowen and then at Schroders were he completed 26 asset purchase and sales worth over $500 million.

Mr. Donenfeld received his M.B.A. from the Fuqua School of Business at Duke University in 1981, where he was a member of the Investment Policy Committee. In addition, he graduated with honors from Tufts University in 1979 with a B.A. in Economics.

We look forward to hearing from you.

Alan P. Donenfeld
President
Bristol Investment Group, Inc.
110 East 59th Street. 29th fl.
New York, NY 10022
Tel: (212) 593-3157
Fax: (212) 202-5022
Email: