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CLX Investment Company, Inc.
Profile provided by CLX
Company Overview
CLX Investment Company is a publicly traded (OTCBB: CLXN) Business Development Company and a Resource Member of the Keiretsu Forum’s East Bay Chapter since October 2005. The Company’s focus as an investment fund is to provide initial capital and critical management services to emerging companies that are well positioned for long-term growth.
A Business Development Company operates as a closed end investment fund and is regulated pursuant to Section 54 of the Investment Company Act of 1940. The 1940 Act and additional subsequent legislation passed in the early 1980s encourages public companies to invest in developing businesses by providing simpler access to capital. In addition to financing, Business Development Companies are mandated to offer management support to their portfolio companies. CLX became a Business Development Company in September 2004 for the purpose of assembling a portfolio of emerging businesses for the benefit of its shareholders.
CLX currently has three solid, revenue generating portfolio investments, each of which is fulfilling its business strategy utilizing the resources provided by CLX. The Company’s first portfolio investment is a non-dilutable 49% interest in eStrategy Solutions, a Texas-based developer of online continuing education, training and professional licensing courses under an exclusive contract with the state information agency. CLX has also invested in and taken a 1 million share stock position in ActionView International (OTCBB: AWVI), a global advertising company that specializes in the manufacturing and marketing of “smart” scrolling advertising billboards. The most recent investment added to the CLX portfolio is a 20% equity position in Zonda, Incorporated, a privately held diagnostic testing company that specializes in products that serve the medical diagnostic (IVD), food safety, and sanitation testing markets.
Investment Strategy
The primary goal for each investment made by the Company is that CLX shareholders will benefit from the development of the portfolio company through the full implementation of its business plan. The benefit may occur in several ways. First, there is a return for CLX built into each investment agreement beyond re-payment of the capital invested plus interest. The form this return takes depends on the type of company that is receiving the investment. Private companies will often provide return through cash payments, generally a percentage of ongoing revenues based on CLX’s ownership position. CLX may take a stock position, which has a market value, in its publicly traded portfolio companies, as is the case with ActionView International. CLX currently has 1,000,000 shares of ActionView common stock, and as this company expands its operation and grows revenues, CLX expects that the value of this stock position will increase.
The payments that CLX receives from its investments are expected to increase the value of the Company’s portfolio. As the valuation of each portfolio company increases, CLX will work to see that any increase in the per share net asset value of the Company is reflected in the trading price of CLX stock. In addition to the capital appreciation of CLX stock, the Company may, at its discretion, issue cash or stock dividends to shareholders, giving further incentive for long-term stock ownership and encouraging market stability. One such issuance occurred recently when CLX declared a 1-for-3 common stock dividend to all shareholders as of September 30, 2005. Finally, the Company and its shareholders may also benefit from spin-outs of certain portfolio investments into separate public companies, with both CLX and its shareholders receiving stock dividends in the new company. The Business Development Company model affords an ease of entrance into the public markets for privately held client companies, and there are certain exemptions upon which BDCs can rely that can fast track the spin-out of a private company into the public markets.
With the Company now at the stage that its portfolio investments are beginning to make regular monthly repayments of the capital it provided to them, CLX anticipates targeting additional investments in the coming quarters in part through the quality deal flow expected from CLX’s association with the Keiretsu Forum.
Current Portfolio Opportunities
The three businesses currently in CLX’s investment portfolio are all revenue generating entities well positioned to achieve quantum future growth.
eStrategy Solutions has occupied an enviable position in the Texas e-learning market. It has partnered with a highly influential lobbying group whose management includes former leaders in Texas state politics, including a former Speaker of the Texas House of Representatives. This relationship has allowed eStrategy Solutions to become the preferred provider of certification, licensing, training and continuing education programs for a client pool of literally hundreds of thousands of professionals in Texas. Several of its online content delivery programs also have national applications, paving the way for exponential future growth.
CLX has provided eStrategy Solutions access to a $250,000 operating line of credit, as well as critical management support in the areas of accounting, human resources, and website development. Upon finalizing its investment in eStrategy Solutions, CLX also appointed one representative to eStrategy Solutions’ Board of Directors.
ActionView International is considered a relatively short-term investment for the CLX portfolio, but with this company positioned to gain a significant share of the multibillion-dollar global advertising industry by expanding into the burgeoning Asia advertising market, beginning with a project at a major airport in China, the return to CLX shareholders could be significant. ActionView recently detailed specific strategies to expand into new markets in Australia, China and India. These and other growth opportunities portend outstanding upside potential for CLX’s stock position in ActionView.
In addition to receiving $200,000 in financing, CLX has furnished legal, accounting and public company compliance support to ActionView International.
Zonda Inc.’s innovative, rapid, self-contained diagnostic device for the detection of a number of infectious diseases has generated growing interest from distributors in countries around the world. The company’s recent appearance at MEDICA, the world’s largest medical supply event was a major success and Zonda is currently negotiating new distribution contracts in markets such as Europe, where Zonda’s chlamydia test carries the CE approval mark for both over-the-counter and professional use. Distribution is already expanding, with the company recently signing an agreement whereby a distributor will supply all pharmacies in Norway and Sweden with Zonda’s rapid chlamydia detection test. Simultaneously, Zonda is pursuing FDA approval in the U.S. and SFDA approval in China. Zonda expects that once it has reached $20 million in gross sales, it will become an extremely attractive acquisition candidate for large medical companies.
CLX has provided to Zonda, Inc. an operating line of credit in the amount of $500,000 and
an array of critical management services in the areas of bookkeeping, accounting, marketing, legal, distribution, manufacturing, public relations, and corporate compliance.
Key Investment Points
CLX has:
- three revenue generating portfolio investments developing to provide significant return to CLX
- eStrategy Solutions has secured a strong position in a large niche market
- ActionView investment executing a successful expansion program in burgeoning Asian advertising markets
- Zonda portfolio investment has potential to be a highly attractive acquisition for a major medical company
- the ability to raise capital through private equity and to issue free trading stock through a $5 million per year exemption from registration
- fixed overhead and ongoing cash distributions from portfolio investments scheduled for 2006
- a broad network of critical management services that it provides to its portfolio companies, including legal, accounting, bookkeeping, marketing, public relations, corporate compliance, and Internet technology.
- multiple methods to return value to shareholders, including dividends of cash or stock
- relationship with Keiretsu Forum expected to provide consistent deal flow of early stage companies with tremendous upside potential
Information for Keiretsu Forum Members
In an effort to strengthen and broaden its relationship with the Keiretsu Forum, CLX has established a website interface that allows Keiretsu Forum members to access publicly disclosed information in a condensed, user-friendly format. Included in the information presented is a PowerPoint presentation with detailed information on the Company, its investment strategy, and its current portfolio. For information on accessing this interface, please contact CEO Tammy Dunn at the telephone number or email address listed below.
Contact Information
Jim Bickel, Director, 650.444.5304
jim@clxinvestments.com
Patrick L. Edgerton, Associate, 925.212.3397
pledgerto@aol.com
Tammy D. Dunn, Chief Executive Officer, 951.587.9100
tammy@clxinvestments.com
www.clxinvestments.com
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