YAKIMA, Washington — For the first time in its 40-year history, CubCrafters, a manufacturer of Light-Sport, Experimental, and Part 23 certified backcountry aircraft, is allowing outside investors in the company.
Anyone in the aviation community who’s interested can invest in the company through the Securities and Exchange Regulation A, CubCrafters officials said.
“It’s very grassroots, there are almost no restrictions on who can invest,” company officials noted.
Advised by Manhattan Street Capital, CubCrafters intends to file with the Securities and Exchange Commission for qualification to launch the public offering in the coming weeks. The company intends to raise capital by selling preferred stock to its fans, customers, aviation enthusiasts, the investment community, and the general public at $5 per share with a minimum investment of $400 per investor.
In the first 48 hours of taking reservations for the stock, more than 1,000,000 shares of stock were reserved by potential investors, CubCrafters officials report.
“With the significant increase in backcountry flying, demand for our aircraft continues to grow. We have a two year plus manufacturing backlog of orders, and there is no end in sight,” said Patrick Horgan, CubCrafters’ President & CEO. “Our founder Jim Richmond initiated the plan to pursue a public offering with the intention to take CubCrafters forward to the next level and secure its future for generations of aviators to come. Jim’s vision will allow us to attain the key goal of continuing to innovate, increase market share, and accelerate the company’s growth.”
“Regulation A is uniquely suited to CubCrafters because the company appeals to a large audience of pilots and aviation enthusiasts,” said Rod Turner, CEO of Manhattan Street Capital. “It has a large and loyal customer base. Providing fans and customers with easy access to become owners of the company makes great use of the online investing process that can be used in this type of public offering.”
Regulation A allows mature startups and later-stage companies to use equity crowd investing platforms to raise as much as $75 million a year from both accredited and non-accredited investors worldwide.
Interested investors can make a non-binding reservation to buy shares at $5 here. Making an advance reservation ahead of SEC qualification locks in the $5 price per share, company officials noted.
Well, shareholders interested in the product is a good thing. Shareholders interested in making money for moneys sake, not good. And to the previous comment, the 5M may be going to initial large investors to let them exit, like you see quite often on Shark Tank. I and many of my friends really like the product, a little expensive but it would be fun to own a piece!
Good investment for low income public
From the Securities and Exchange Commission:
“Regulation A allows companies to offer and sell securities to the public, but with more limited disclosure requirements than what is required for publicly reporting companies. In comparison to registered offerings, smaller companies in earlier stages of development may be able to use this rule to more cost-effectively raise money.”
“Speculative. Investments in startups and early-stage ventures are speculative and the businesses may fail.”
“Illiquidity. Even though there is no resale restriction, you may need to hold your investment for an indefinite period of time.If the securities are not, and if there are no plans for the securities to be, listed on an exchange where you can quickly and easily trade the securities, you will have to locate an interested buyer when you do seek to resell your investment.”
On a personal note: I just don’t trust guys with goatees. That look reminds me of depictions of Satan.
If they do sell a million shares at $5 or more, they will now have a huge capital infusion to improve and develop new aircraft, without any ‘loan’ payments or commitments.
I imagine that they have been using loans to finance the business, either from banks or individual private investors, who have expectations of repayment with interest.!
This is a bold move and I hope that it makes them more successful in the GA aviation business.!!
Bummer, now they will have a business model that is more about shareholders than customers