Rapidly expanding B2B ‘lo-energy’ lighting manufacturer and distributor’
Trading for over three years, LX Lighting Distributors Ltd (LX) owns and distributes the ‘Loxa’ brand of lighting products and is currently implementing a strategy to provide a more focussed range of high quality products at value prices. LX needs more investment capital to do this. However, you are NOT being asked to invest in LX directly. You ARE being asked to potentially invest in ML Creations Ltd, an SEIS/EIS authorised company which will act as a supply company to LX.You potentially get a tax relief and we may give you half of our potential profits for the next three financial years. After 3 years you can potentially sell your shares and realise your potential tax free return
Products & Services
LX Lighting Distributors Ltd (LX) is a recently formed company engaged in the innovative design, manufacture and distribution of low energy commercial lighting and has already developed a key position in this growing market and successfully established a strong customer base with UK wholesalers. The ‘Loxa’ brand of low energy commercial lighting products was launched in April 2012 and rapidly developed a key position in this growing market. Manufacturing in China, LX has successfully established a strong customer base with all major UK electrical wholesalers including CEF, Rexel Group, Edmundson Electrical and YESSS electrical.
MLC holds the sole import rights to ‘Loxa’ branded products for the three years from 1st August 2015 to 31st July 2018 (the minimum trading period required for EIS shares to maintain their beneficial tax status). MLC will purchase product from suppliers and resell to LX at zero margin. For this service, MLC will make an annual management charge to LX equal to 50% of LX’s profit before tax for the three years ending 31st March 2016, 2017 and 2018. MLC will maintain retention of title to all goods until sold by LX. MLC will also receive a second priority fixed and floating charge against the assets of LX (after Close Invoice Finance Ltd). Both companies will be audited by PwC.
MLC will receive half of the profits generated by LX. LX already has a defined route to market with growing sales to UK electrical wholesalers. Details in full prospectus.
SEIS and EIS rules do not allow a pre-arranged exit strategy. However, at the end of the three-year minimum period required to qualify under the Seed Enterprise Investment Scheme and Enterprise Investment Scheme, there are several possible exit options. LX could purchase all shares in MLC for the asset value of the company and shareholders would realise the non-taxable gain. An alternative option would be to dissolve the company, with all remaining stock sold to LX and the bank assets distributed to shareholders on liquidation of the company, with the non-taxable gain realised at this point.