PT. II
PRELIMINARY oFFERING CIRCULAR
(in accordance with REGULATION FORM 1-A)
Cover Page
WEB DEBT SOLUTIONS, LLC
WEBDS
4812 CRUSE RD
HOUSTON, TX, 77016
WWW.WEBDEBTSOLUTIONS.COM
06/15/2016
Item 1:
(a) WebDS is the established name and logo
(b) used by for New York Stock Exchange and
NASDAQ for Web Debt Solutions, LLC. A company
which is seeking to offer equity to
shareholders and the public as an Initial Public
Offering at a rate of $49.00/share. (h)
Risk factors section is listed as follows:
Table of Contents
(i)The approximate day of commencement of
proposed sale to the public is July
20th, 2016.
(j)The bona fide estimate of the range
of the maximum offering price is $59,
although the set price is $49 for securities
being offered. The maximum number of
securities being offered is approximately 408,163.
Also there will be no "best efforts"
offering conducted during this offering.
TABLE OF CONTENTS
1. Cover Page Part II
Item 1 First Page
2. Table of Contents Part II
Item 2 Second Page
3. Summary and Risk Factors
Part II Item 3
Third Page
4. Dilution Part II
Item 4 Fourth Page
5. Plan of Distribution and Selling Security
Holders
Part II Item 5
Fifth Page
6. Use of Proceeds to Issuer Part II Item 6
Sixth Page
7. Description of Business Part II Item 7
Seventh Page
8. Description of Property Part II Item 8
Eighth Page
9. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II Item 9
10. Directors, Executive Officers and
Significant Employees
Ninth Page
Part II Item 10
11. Compensation of Directors and Executive
Officers
Tenth Page
Part II
Item 11
12. Security Ownership of Management and
Certain Security holders
Eleventh Page
Part II Item 12
13. Interest of Management and Others in
Certain Transactions
Twelfth Page
Part II Item 13
Thirteenth Page
14 Securities Being Offered Part II Item 14
Fourteen Page
15. Part F/S Part II
Item 15 Subsection: (a)
General Rules
16. Financial Statements for Tier 1 Offerings
Fifteen Page
Part II
Item 15: Subsection: (b)
Sixteenth Page
17. Index to Exhibits Part III Item 1
Seventeen Page
18. Description of Exhibits Part III Item 17
Eighteenth Page
Summary and Risk Factors
(a)
The Primary Goal in offering the Initial
Public Offerings under Tier 1 Offerings is to
raise working capital to expand and grow business
to lead the industry. Being that this is
the first Tier 1 being offered as an IPO for Web
Debt Solutions, LLC, the time frame
would be one year in getting the funds raised for
Company. The industry as a whole has a
net worth of close to $100,000,000,000. There are
hundreds of debt collection agencies in
the field but only 3% make up 90% of the net worth,
which puts the other 97% at a "high
risk" of not being able keep longevity. This is a
major reason why Web Debt Solutions,
LLC has staying power, the owner alone has 15
years of qualified experience with dozens
of companies around the world. All of the executive
officers have at least 10 years of
experience in making and have made multimillion
dollar deals, sales, and revenues
happen.
(b)
The industry of Debt Collections is considered
"high risk" but Web Debt Solutions, LLC
has been able to overcome all obstacles and stand
as the startup company from 2014 to
2016 to generate revenues. Also if the IPO does not
take off right away and generate the
funds needed for the Tier 1 Offering. Though this
is a risk factor, Web Debt Solutions,
LLC has hundreds of clients worldwide that even
having 408,163 shares available for
purchase would not be enough.
ITEM 4
DILUTION
There is a material disparity between the public
offering price and the effective cash cost
to officers, directors, promoters, and affiliated
persons for shares acquired by them in a
transaction during the past year or that they have
a right to acquire will be put in a
rational form. The pricing for the public to acquire
shares would be $49 to $59 and for
affiliates of the company $29 to $35 per share, and
these prices vary depending on the
number of shares being purchased. This pricing is
based on the full 408,163 shares being
offered and sold under this offering. The price
and amount of the price within the groups
of purchasers are subject to change if a filing
for a different tier takes place. There will be
Preemptive Rights Protection to help protect those
who purchase and have ownership
with the company. The preemptive rights protection
will be in place- Preemptive rights-
are for shareholders: it will protect them from
dilution and give rights to dividend and
voting power. This will take effect once company
goes public.
Item 5
PLAN OF DISTRIBUTION AND SELLING
SECURITYHOLDERS
(g)
The company will have a total of 408,163 shares
available for distribution during the IPO
phase of the Tier 1 Offering. Affiliates of the
company will be able to purchase shares at
a discounted rate of 40% to 50% off. The public
will be able to purchase between $49 to
$59 depending on the amount purchased. Being
the public can hold up to 6% equity in
the company and affiliates 4%, this will help
limit the stabilize the market for any of the
securities to be offered. There are no such
arrangements for the return of funds to
subscribers if all of the securities to be
offered are not sold.
Item 6
Use of proceeds to issuer
The principal purpose for which the net
proceeds to the issuer from the securities to be
offered are intended to be used for:
approximate amount
1. Expansion and to open new offices worldwide
2. $5,000,000 to $8,000,000
3. New Start Ups/Subsidiaries
4. $2,000,000 to $3,000,000
3. Advertising and Marketing
$1,500,000
5. To better trade on a larger scale
6. $2,000,000
5. % to be distributed to Company owner and
affiliates $2,000,000
And the remaining will be put in a interest bearing
account an equity account for Web
Debt Solutions, LLC.
Item 7
Description of business
The term 'Collection Agency' is defined as
a business that pursues payments of
debts owed by individuals or businesses. Most
collection agencies operate as agents of
creditors and collect debts for a fee or percentage
of the total amount owed. There are
many types of collection agencies. First-party
agencies are often subsidiaries of the
original company the debt is owed to. Third-party
agencies are separate companies
contracted by a company to collect debts on their
behalf for a fee. Debt buyers purchase
the debt at a percentage of its value, then attempt
to collect it. Each country has its own
rules and regulations regarding them. Web Debt
Solutions, LLC will operate primarily as
a third party agency, but will also act as a
first party agency for clients who do not
perform in-house collections but have not charged
off debts of a customer or business.
Debt buying will also be performed in the event
client is offering portfolios for sale for a
percentage or fee to relieve them from the duty of
being a beneficiary of the debtors
account or invoice. Due to industry market
every changing in accordance to economic
development, the company will be safe to generate
revenue and sales despite a recession
or a surplus economic state. In collections, it
is a necessary for all clients, vendors, and
customers due to world of "Credit." Credit is the
trust which allows one party to provide
money or resources to another party where that
second party does not reimburse the first
party immediately (thereby generating a debt),
but instead arranges either to repay or
return those resources (or other materials
of equal value) at a later date. The resources
provided may be financial (e.g. granting a loan),
or they may consist of goods or services
(e.g. consumer credit). Credit encompasses any
form of deferred payment. Credit is
extended by a creditor, also known as a lender,
to a debtor, also known as a borrower.
Capability of the Firm:
The proposed approach in getting this done would
be: Negotiating the contract terms with
client, fees between vendor and client will be
due 10 days upon an agreed and signed
contract. Once the transmission of accounts/
invoices are sent, then the accounts/invoices
will then be sent to the IT and COO and "scrub"
the accounts for new contact
information. Being that these are student loan
accounts and Perkins cohort accounts these
will be the basic operations would be for the
company's sales team or the CEO to
establish contact with a potential client.
Upon establishing a business relationship and
interest of all agreeable parties, a NDA or
Non-Disclosure Agreement (better known as a
confidentiality agreement) is signed by all
interested parties. This creates a confidential
relationship between the parties to protect
any type of confidential and proprietary
information or trade secrets. As such,
an NDA protects nonpublic business information.
The collections attorney will oversee this
entire process until the receipt of accounts from
person(s) or businesses to the company for
collections on debts. Once terms of a contract
is established, potential client may or may
not request an onsite visit to ensure securities
and other precautionary measures are met upon
placements of accounts. If this is
required, a meeting with the executive officers,
IT's, managers, and attorneys will take
place with potential client to get all
interested parties better acclimated in order to
proceed with agreed terms of contract.
Terms of contract will vary depending on client,
needs, time, date, number of placements, and
other variables that will customize the
contract with all interested parties with the
company. The collection attorney will oversee
this process, draft, and approve contracts with
clients, their attorney (if applicable), and
executive officers of Web Debt Solutions, LLC.
Upon signatures of all interested parties,
transmissions of funds for the fee company will
charge (if applicable) must be received
before the recovery process can start. If in the
event the agreement is for debt purchase,
the amount that was agreed and approved by all
interested parties will be transmitted to
person(s) or business that is relinquishing debts
for purchase. If the contract is for
contingency work, the accounts will be transmitted
in an approved manner that will be
compatible with agreed parties technical support
and software. Information(s) will be
loaded unto company's database whether contingent
or purchased inventory. This will be
done by IT's, then a "scrub" will be performed to
update debtor(s) information to ensure
proper methods of reaching parties are performed
at a high rate of contact. Then upon
approval of executive management, the inventory is
sent letters according to the laws of
each debtor(s) state for validation of debt and disputes.
Once completed, in accordance
with federal, state, and local laws and regulations,
the company will send letters to have
customers and consumers validate the debt with 30
days to do so. After 2 days after the
letter has gone out, the inventory is then distributed
to collectors according to knowledge,
skill, and type of products.
Work plan: Highly trained and acknowledgeable staff
have worked with secured and
unsecured loans these along with overdraft bank
accounts with major banks and credit
union such as Navy Credit Union, Wells Fargo,
and Bank of America. Also
understanding that procedures between credit unions
and banks vary and have specialized
collectors in only one field or the other
working credit unions or banks.
The main operations: The company's primary
duty as a collection agency is to recover
and collect delinquencies from debtors and
businesses that would be deemed
noncollectable by client, vendor, or any
person(s) or businesses that extends any form of
credit, and to purchase any debts by person(s)
or business that offers accounts for sale to
relieve original creditor duties of recovering debts.
Item 8
Description of Property
The first official office was opened in
March 13, 2015 in
444 W Lake St SUITE #305
CHICAGO, IL, 60606.
A sophisticated exterior and interior design
will complement the extraordinary views of
the Chicago River, Wacker Drive and the
Chicago Central Business District. The project
includes 1.5 acre landscaped plaza, park &
and river walk along the Chicago River.
Convenient access to public transportation
with access to two METRA Train Stations,
multiple bus routes and CTA elevated lines.
Amenities include a caf, 24-hour lobby
security desk, conference center, fitness
center, and a 24-hour ATM. Underground
Parking available on three levels with 24/7
access for 160 cars. Registered with U.S.
Green Building Council and is pre-certified LEED-CS Gold.
With close to 25,000 sq feet of space this
allows for a full call center space that holds
over 200 employees. For now about 10,000
sq feet of the space has been utilized, thus the
reason for the Tier 1 Offering so that the
office and business can expand and bring in
more clients, employees, and customers.
Item 9
Management's discussion and analysis of financial
condition and results of operations
(a)
Being that Web Debt Solutions, LLC started
in 2014 with the owner already 15 years in
the industry, the company started off in a
gross profit from the 1st and 2nd month.
Originally starting up doing debt purchasing
and 3rd party collections for some of the
major and minor clients such as: Regions Bank,
Yonkers Teachers Federal Credit Union,
and Centura Urgent Care. Working in an
industry that has a mixture of many forms of
issuance of credit, collecting debt on
delinquencies can prove to be a task depending on
the type of client, age, amount, and
other specific factors. With this, it changes the sales
that come in, revenues produced, and of
course affects the operations of the company
from year to year. To get a better
understanding of the company from an investors point
of view: The operations of the company,
Web Debt Solutions, LLC is one to be quite
diverse and detailed to explain the full
operations from start to finish from each
department in making up the whole of the
collection agency. The collection attorney,
which a necessity to act as a legal
representation to ensure that the company is protected
in a legal manner, ensuring that company is
safe free from all forms of litigation and
fines from the interstate commerce, clients,
vendors, and customers. In the event a
mishap takes place, the attorney will represent
the company in taking action to keep
fines, costs, losses, disputes, or damages
against the company to minimum. Due to
regulatory laws ever changing, the company's
collection attorney will safeguard and
continually update company is regards to
these changes, and interacting with compliance
manager ensuring every employee of the company
is tested and certified that they are
knowledgeable and adhere to the changes of rules,
laws, and regulations.
Per the Annual income statement from
2014 and 2015, the revenues increased from
the very beginning of Web Debt Solutions. LLC.
The revenues grossed in 2 months alone
was over $3,643,000. Being that the owner has
15 years of experience in the industry, the
move from another company to a start up with
the continuance of clients and customer
base made it fairly smooth to transition over.
Being that the company is 1st, 3rd party
and also does debt purchasing and a startup,
Web Debt Solutions, LLC has some liquid able
assets that has a valuation will over
$15,000,0000. In terms of short term lquidablitity,
having equity stock with the company
can and will generate more revenue and help
increase the value of the company. (d) The
biggest trend right now with the company is
that in the last quarter, more clients tend to
drop more business, making the last quarter
usually the highest months of revenues
generated.
The company's current financial condition is
stable. The company is currently in surplus
being that assets were liquidated to have a
startup plus there were mutual funds already in
place for Web Debt Solutions, LLC. Borrowing
has been kept to a minimum for the past
2 years bringing the debt percentage to 3.8%
of the current income and revenues
generated for the year of 2015 and 1st quarter
of 2016. The financial changes made that
took a drastic change for the better was the
reported earnings of 2014. This enabled Web
Debt Solutions, LLC to lock and secure 27 more
contracts in the 1st quarter of 2015 and
bring in over a net total of $9,000,000 before
services were rendered to the 27 new
clients. This is having been the biggest financial
boom so far for Web Debt Solutions,
LLC as a startup and a financial service company.
Item 10
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT
EMPLOYEES
NAME:
POSITION:
AGE:
TERM OF
OFFICE
Approximate
hours per week for
part-tiime
emplouees
EXECUTIVE
OFFICERS:
1.STEPHANIE
IZEVBIZUA
2. ELIZABETH
ROSE
3.MARIAH
WELLINGTON
1. DIRECTOR
OWNER/CEO/DIRECTOR
2. CFO/ACCOUNTANT
DIRECTOR
3.COO/DIRECTOR
1. 31
2.43
3. 54
1. 4 YEARS
2. 4 YEARS
3.3 YEARS
FULL TIME (75
HOURS/WEEK)
PART
TIME/FULL
TIME (35-45
HOURS//WEEK)
PART
TIME/FULL
TIME (35-45
HOURS/WEEK)
DIRECTORS:
ALL OFFICERS
ALL OFFICERS
ALL
OFFICERS
ALL
OFFICERS
ALL OFFICERS
SIGNIFICANT
EMPLOYEE:
1.CHRIS DEAN
1.DIRECTOR/
GENERAL MANAGER
FOR SALES AND
MARKETING
1. 42
1. 3 YEARS
1.PART
TIME/FULL
TIME (30-45
HOURS/WEEK)
1. STEPHANIE IZEVBIZUA started the company
2. in Dec. 2012 but made it an LLC in Feb
3. 10, 2014. She
is the CEO and Owner of Web Debt Solutions, LLC.
-Has worked directly with American Express,
Bank of America, Chase, and Wells Fargo.
-Has lifted a company that only grossed $4
million a month to over $20 million a month in 5
years.
-Contracted a multimillion dollar deal with
the largest oil company in Texas in 1 month.
2. Elizabeth Rose started working for Web Debt
Solutions in Dec of 2012. Being she is
a certified accountant, she became the company's
CFO to oversee all financial
transactions between the company and clients.
Prepared federal and state tax returns for
over 200 of Individuals, 30 of partnerships, and
25 of corporations annually
Researched inbound international tax issues
for clients, such as NRA investment for US
properties
Worked on compilation and review reports
including compiling financial statements
Performed an operational audit of internal
control resulting in improved controls and
operating efficiencies
4. Mariah Wellington started working for Web Debt
5. Solutions, LLC in Oct. of 2013
and quickly became the COO running the operations
of the company on a quicker and
resourceful scale. ? Focused leader, recognized
for delivering superior results.
Well qualified executive with over 20 years
of experience managing high level
corporate operations.
Articulate communicator, capable of building
lasting relationships with senior
management of clients, partners and vendors.
Visionary, with track record for finding
innovative ways to grow revenue and
increase margins.
Experienced in the negotiation of high level
contracts.
Well versed in presentations, accustomed to
addressing clients, vendors, partners,
shareholders and corporate board of directors.
Managed multi-million dollar budgets with
full P&L responsibility.
4. Chris Dean started working for Web Debt
Solutions, LLC in Feb 2014 right when the
office launched. Being highly knowledgeable
in sales, marketing, and a background
knowledge of debt collections, he has proven
by driving up revenues over the last 4
quarters above expectations.
Advanced through a series of promotions,
culminating in oversight of group copy
division and 6-member creative team.
Created concept and copy for journal ads,
direct mail campaigns and sales
collateral for diverse clients and projects.
Selected Accomplishments:
Served as primary copywriter on
advertising campaigns for multimillion
dollar accounts and successful product launches. o
Assumed a lead role in
pitch team meetings due to strengths in
presentation and negotiation skills, and
helped close major accounts ($500K to $1M+
initial contracts). o Generated
campaign response-rates of between 6% and 8%
(up to 4 times the industry
average).
ITEM 11
COMPENSATION OF DIRECTORS AN EXECUTIVE OFFICERS
NAME
CAPACITIE
S IN WHICH
COMPENSA
ION WAS
RECEIVED (
CEO
DIRECTOR)
($)
CASH
COMPENSATI
ON
($)
OTHER
COMPENS
ATION
($)
TOTAL
COMPENSATION
($)
1.STEPHANIE
IZEVBIZUA
2.ELIZABETH
ROSE
3. MARIAH
WELLINGTO
N
1. $9,680,000
2. $1,694,000
3 $2,170,000
1. $7,260,000
2. $480,000
3. $350,000
1. $2,420,000
2. $125,000
3. $200,000
1. $9,680,000
2. $2,299,000
3. $2,720,000
the average for bonus and commissions
for 2014/2015
The compensation that is listed above in
the table shows what each executive officer
made as an
average in 2014 and 2015 as a bonus and
commissions. The salaries for each officer
are broken
down into:
1. CEO-$400,000
2. CFO- $250,000
3. COO- $250,000
4. GENERAL MANAGER/DIRECTOR $125,000
Doing this Tier 1 Offering would slightly
increase bonuses across the board depending on how
well the IPO's sell, though the % would only
increase by 0.00250.
The account department or the CFO will
process all payrolls for all employees and members of
the company using accounting software made
by Intuit. This will assist in payroll, taxes, and
balancing the finances of the company to
make sure a budget is followed. Salaries
of employees/
pay structure and all interested parties
will be as follows:
For the Owner/CEO-The salary paid yearly
will be minimum base pay of $250,000 year
depending on the sales and revenues of the
company with a yearly bonus on a sliding
scale up to
10% yearly based off of profits made by
company. Commissions will be paid monthly based on
profits made up to 10%. The pay for the
CEO will be semi-monthly and paid accordingly per
employee handbook.
A one-year evaluation will be performed on
every employee that is part of the company
after one
full year of employment from the starting
date of employee. At that time employee may be
eligible for a pay raise, salary increase,
increase in commissions or bonuses, and awarded a
possible yearly bonus depending on the yearly review.
The bonuses will be paid out on separate
period from commission pay. There will be 2 pay
periods each month due to pay being semimonthly.
These numbers are a median but actual
numbers will be based off of production,
revenues, and
profits.
ITEM 12
SECURITY OWNERSHIP OF MANGEMENT AN CERTAIN
SECRURITY HOLDERS
EXECUTIVE OFFICERS and directors as a group,
initially naming each director
officer who
(1) All beneficially owns more than 10% of any
(2) class of the issuer's voting
securities:
(a) Stephanie Izevbizua
TITLE
OF
CLASS
NAME AND
ADDRESS
OF
BENEFICIAL
OWNER(1)
AMOUNT
AND
NATURE OF
BENEFICIAL
OWNERSHIP
AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP
ACQUIRABLE(2)
PERCENT
OF
CLASS (3)
CLASS A
STEPHANIE
IZEVBIZUA
4812 CRUSE ST
HOUSTON, TX
77016
$20,000,000
Tier 1
Offering
$20,000,000
Equity/Stocks
100%
Item 13
INTEREST OF MANGAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS
(a) Some of the transactions and current proposed
(b) transactions during We b Debt Solutions, LLC
last two completed fiscal years which the issuer
has amounts that exceeds $50,000 would be
1. The startup cost for the Web Debt Solutions,
2. LLC- $2,700,000
(1a) STEPHANIE IZEVBIZUA- OWNER AND CEO
3. Supplies and furniture for Web Debt Solutions
4. , LLC- $1,500,000
3. The Company Property-$1,500,000
4. Filing fees and taxes- $36,687,200
(1a)
Item 14
SECURITIES BEING OFFERED
(a) Capital stock (equity) is being offered for
(b) the Tier 1 Offering. The title of the class is
Class A Mutual Funds Share.
(i) Dividend rights- @ the time of closeing dates prior to
distribution, shareholders must have
acquired shares of 25% of acquired stock (12.50)/
dividend for 2 years. Meaning once public the
Dividend Rights will then be put into place.
(ii) voting rights- corporate actions or
issuance cannot disparency reduce or restrict
the vote right
of existing shareholders given to existing shareholder.
(iii)the Liquidation rights is to have the rights
to liquidate or sell equities or shares not to exceed
60% of current price.
(iv) Preemptive rights- are for shareholders: it
will protect them from dilution and give rights to
dividend and voting power.
(v) The Conversions Rights- which will be given
to share holders also refers to the shareholder's
ability to convert the preferred shares into common
shares. Conversion rights are important as
they affect the calculation of other rights of
shareholders. Most calculations use the number of
outstanding shares "on an as-converted basis".
(vi)The redemption provisions will happen when
the corporation can forcibly call the shares for
cash. Call provisions include the call date,
which is the first date on which the corporation
can redeem the shares.
(viv) The sinking fund provision allows
shareholders repay funds that were borrowed through
a bond issue.
(viii)the liability to further calls or to
assessment: N/A
(ix) any classification of the board of
Directors, and the impact of classification where
cumulative voting is permitted or require.
The top priority in decision making not
necessarily applicable. Meaning this will be
implemented and put into action upon Web
Debt Solutions, LLC being a public and active
trading company.
(x) restrictions on alienability of the
securities being offered: N/A
(xi) any provision discriminating against any
existing or prospective holder of such securities
as a result of such security holder owning a
substantial amount of securities: N/A
(xii) rights of Holders that may be modified
otherwise than by a vote of a majority or more of
the shares outstanding, voting as a class: N/A
PART III
INDEX OF EXHIBITS/ITEM 17
A. UNDERWRITING AGREEMENT.............
(none used- n/a)
Item 5
Page 4
B. Charters and Bylaws..............
C. Instruments defining the Rights of
Item 14
Page 16
Security Holders...........
Item 14
Page 16
D. Subscription Agreement
(upon purchase of securities of this offering
Shareholders
agree to the following:
1. Terms and conditions of issuers Req. for
2. Purchase
2. Fees/int. associate with purchase
3. Unless buying in bulk agree to be shareholder
Without having major own share with company).....
.... Item 14 Page 16
E. Voting Trust Agreement
(The voting Trust agreement is for all shareholders
Of WEBDS that have a minimum of 1% equity Web
Debt
Solutions, LLC or more. This agreement allows
all Share
Holders to:
1. Call general meeting
2. to create a unified block of votes
3. Help resolve conflicts of interest
......
.......... Item 14 Page 16
F. Material Contract..............
Item 10, 14 Page 11, 16
G. Plan of Acquisition, Reorganization,
Arrangement,
Liquidation, or Succession.................
Item 9
Page 11, 12
H. Escrow Agreements..........
Item 9
Page 9, 10
I. Letter re change In Certifying
II. Accountant...... Item 9
J. Power of Attorney..... N/A
K. Consents.......... N/A
Page 9
L. Opinion le Legality...........
Item 5
Page 6
M. "Testing the Waters" materials.......
Item 5
Page 6
N. Appointment of agent for service of
process....... N/A
O. Additional Exhibits....... N/A
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