Frequently Asked Questions for Investors
Leonhardt’s Launchpads by Cal-X Stars Business Accelerator, Inc.
Leonhardt’s Launchpads by Cal-X Stars Business Accelerator, Inc.
Q: Where is Leonhardt’s Launchpads headquarters?
A: 12655 W Jefferson Blvd, Los Angeles, CA 90066
Q: When was Leonhardt’s Launchpads formed?
A: Accelerator/incubator operations for organ regeneration and recovery focused startups began in Northern California in 2008, in Southern California in 2012 and in Utah in 2015. Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads was incorporated in California in 2013, Leonhardt’s Launchpads Utah, Inc. was incorporated in 2016 in Utah. Leonhardt Ventures LLC began in 1982 in Minneapolis, Minnesota as HJ Leonhardt & Co. a sole proprietorship and was converted to Leonhardt Vineyards LLC in 2005 and DBA Leonhardt Ventures in Los Angeles in 2013 and Leonhardt Ventures LLC in 2018. Leonhardt Ventures LLC the parent of Leonhardt’s Launchpads was founded in Minneapolis, Minnesota in 1982 originally as H.J. Leonhardt & Co., moved to Savannah, Georgia in 1983, to Miami/Ft. Lauderdale in 1985, to Geyserville/Santa Rosa, California in 2000 and to Santa Monica/Los Angeles, CA in 2008 with a branch office opened in Salt Lake City, Utah in November 2015. Leonhardt Ventures LLC headquarters today is at 12760 Millennium Drive, A213, Playa Vista, California 90094 which is in the Los Angeles metro area.
Q: Where does Leonhardt’s Launchpads operate?
A: Los Angeles (Playa Vista), Santa Monica and Pasadena in Southern California at WeWork and at 12760 Millennium Drive, Unit 213, Los Angeles, CA the Leonhardt Ventures LLC headquarters. Petaluma at the University of Northern California in Northern California and at the C&S Business Incubator and BioInnovations Gateway in Salt Lake City, Utah. We have technology development, testing and manufacturers collaborations with Biomerics in Utah, Biomerics Advanced Catheter in Minneapolis, Mettler Electronics in Anaheim, CA, Prizm Medical in Modesto, Ca, QIG Greatbatch in Santa Clarita, CA, Nelson Labs in Utah, Minnetronix in Minnesota, U of Louisville in Kentucky, Caltech, UCLA and USC in the Los Angeles area, Forysth Institute and Tufts University in Boston, the University of Utah in Salt Lake City, Los Angeles Biomedical Research Institute in Torrance, CA and the Pacific Neurosciences Institute in Santa Monica, CA.
Q: Where do Leonhardt’s Launchpads startups conduct their research?
A: We have access to our own lab research space at these locations:
1. BioInnovation Gateway, South Salt Lake City, Utah.
2. Pacific Neuroscience Institute, Santa Monica, CA
3. University of Northern California Science & Technology Innovation Institute.
We have access to additional research facilities via Scientific Advisory Board with more than 37 members.
We conduct research at numerous universities including the University of Utah, UCLA, USC, Caltech, Tufts University, Forsyth Institute, University of Buenos Aires, Queenland University, University of Louisville, Ohio State, University of Arizona, University of Georgia, University of Miami, Texas Heart Institute. We have access to the Los Angeles Biomedical Research Institute (LA Biomed) for pre-clinical studies and core labs at UCLA and University of Utah for numerous support services including small animal studies.
We conduct research at these technology partnership facilities.
1. Biomerics Advance Catheter, Minneapolis, Minnesota.
2. Biomerics Utah, Salt Lake City, Utah
3. Fluid Synchrony LLC, Pasadena, California.
4. Mettler Electronics, Anaheim, California
5. QIG Greatbatch, Santa Clarita, California.
6. Prizm Medical, Modesto, California.
Q: Who currently owns Leonhardt’s Launchpads by Cal-X Stars Business Accelerator, Inc.?
A: Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads currently has approximately 165 stakeholders. 50.1% is owned by Leonhardt Ventures LLC and 49.9% is held by 164 other stakeholders the lions share of whom are involved with the company as advisors in addition to being investors.
Q: What is the Leonhardt’s Launchpads business model?
A: We focus on organ regeneration and recovery innovations and startups. We accelerate approximately 30 to 35 innovations and their corresponding startups in any given portfolio class year. Most of the startups are based on the same Leonhardt patented and patent pending technology platform of bioelectric stimulation + micro infusion pump + mixed stem cell based regeneration composition just directed towards different organs. The business model is to accelerate each innovation through first-in-man clinical study results and then seek out a strategic partner/buyer to carry the development the rest of the way to market leadership. The accelerator strives to arrange a 3% royalty on net sales for all products forward when possible. We have a small portfolio of three regenerative economy startups that are designed to generate short term revenues and profits which are intended to re-invested in organ regeneration and recovery research non-dilutive to shareholders.
Q: What is the 2:1 accelerator investment deal for early stage investors?
A: This means if you invest as example $30,000 you receive $30,000 value worth of stock shares certificate in Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads AND a warrant giving you the right to acquire $30,000 worth of shares of any of the startups in the accelerator at no additional charge. So you receive 2:1 $60,000 worth of shares in exchange for a $30,000 investment. You can wait until Dec. 31 of the year you invested to decide your allocation or you can apply it immediately. You can for example allocated $1000 each into all 30 startups OR you can decide to allocated $10,000 each into only 3 of your most favorite startups. In all cases the conversion of cash warrants into shares is at the prevailing market price of the shares at the time of executing the warrant.
Q: How is our private placement filed?
A: Under 506D part C in California and other states which permits public solicitation and is restricted to verified accredited investors only. The original accelerator PPM was created and filed in 2013 with the help of Methven & Associates and is updated annually with our Annual Report or Newsletter.
Q: Where can I find current shares prices and valuations for each startup to know the number of shares I would receive when I convert my held 2:1 warrant into shares?
A: Current share prices and valuations may be found at https://leonhardtventures.com/our-companies/#toggle-id-2 and by writing to email@example.com or firstname.lastname@example.org requesting that information by email
Q: What is the advantage of applying my 2:1 warrant into startup shares immediately instead of waiting until Dec. 31st of the year I invest?
A: If you allocate your warrant immediately into a startup’s shares the advantage is that you get that current lower strike price. During the course of the year the per share price will be increased in increments as the startups achieves major development milestones.
Q: What is the advantage of waiting to apply my 2:1 warrant into startup shares until the last possible day December 31st of the year I invested?
A: The advantage of waiting is you get sit back and watch and monitor the progress of each startup during the course of the year and can decide to allocate to startups that have reduced risk by gathering more data, gaining more talented team members or more protective patents or may be on the brink of securing a strategic partnership. If your goal is to minimize risk not strike price and to only choose to allocate to those startups most close to securing a strategic partnership, then this waiting strategy may be right for you.
Q: How exactly do I get a return on my investment?
A: In earliest launch stages the startups are all valued between $2.3 million and $5 million and the goal is to sell them after first-in-man results for $230 million to $980 million with a 3% royalty forward on net sales ideally. We have a goal to have at least 6 startups in position to be ripe to secure a strategic partner/buyer each year over the next 5 years totaling 30 over 5 years. Upon the close of each sale the proceeds are distributed immediately to all stakeholders. Royalty checks will be distributed pro-rata on a quarterly basis as the royalties are received. The target long term 5 year plus goal for ROI for accelerator shares is 23X your original investment and for individual startup shares 63X your original investment. Of course these lofty goals will be very difficult to reach with many obstacles and risks in the way.
Q: What percentage ownership does Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads have in each startup?
A: Cal-X Stars starts off with 9% ownership in each startup in exchange for startup launch support services. As money comes into the accelerator and is allocated into the startups their ownership stake increases. Cal-X Stars has a pre-emptive right to acquire up to 20% ownership in each startup during the full course of acceleration within the accelerator. Dilution from direct investors, advisor and direct management server to lessen the percentage of ownership. It is expected at the time of exit Cal-X Stars on average will hold somewhere between 8% and 20% ownership of each startup but in some cases this could be lower and in some cases higher.
Q: Can you show an example of what I would get if you reach your goal to sell 12 startups two year with a 3% royalty forward on sales?
. As a hypothetical example let’s say you invested $120,000 in Cal-X Stars Accelerator Inc. on 2:1 terms in early 2018 and immediately applied your warrant allocation as below in even increments of $10,000 each in our top 12 startups progressing towards strategic partnerships/buyers.
You would receive…
$120,000 shares of Cal-X Stars Business Accelerator, Inc. at $0.36585 a share = 328,004 shares
You would receive 2:1 $120,000 worth of startup shares as follows….
Q: How much is the company raising, what does that give the investors and where does that capital take us?
A: We are raising $15 million through the accelerator which gives the buyers close to 49% ownership of the accelerator before advisor and management options are exercised and about 20% ownership of all 30 (32) startups. It is estimated that advisor and management option exercises will dilute accelerator ownership holdings by 15 to 30% and startup holdings by 10 to 15% over time if ALL eligible stock options are exercised. This amount of capital is deemed sufficient to take us to exit after first-in-man results for all 30 startups assuming investors will voluntarily re-invest some of their winnings of early exits into later exits. Our plan is 6 exits a year starting in 2018 for the next 5 years to reach 30 exits after 5 years of acceleration. As startups exit new ones will come forward to take their positions in the accelerator.
Q: What is the basic development plan for the startups over the 5 year course of acceleration with the accelerator.
Q. What are the basic budget costs for each stage of development of the startups in the bootstrapping mode?
Q: What happens for Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads shareholders when exits occur?
A: Their pro-rata portion of that asset sale is distributed to them the day after closing. Example > if OrthodontiCell sells for $780 million and Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads shareholders hold 20% ownership at time of sale then the day after the closing $156 million would be distributed pro-rata to each shareholder according to their ownership position in the accelerator and if any of those Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads stakeholders also had a stake, lets say 10% directly in OrthodontiCell as an example, they would also receive $78,000,000 more. Each investor gets one distribution from the accelerator and another directly from the startup itself, if they have a direct stake in that startup separate from their accelerator ownership.
Q: What are management’s ROI goals for the accelerator and the startups?
Q: What are the biggest risks?
Q: What exactly does the core bioelectric technology patents do and why is it important?
Q: How are patent licenses handled amongst accelerator startup portfolio companies?
A: If a startup is accepted into the accelerator they automatically get exclusive rights to any patents held by the accelerator for the organ they serve ie; eye for EyeCell, liver for LiverCell. If any startup that has not yet graduated from the accelerator makes a new discovery that converts into a new patent the other organ specific startups within the accelerator automatically get an exclusive license to their organ. There are rare exceptions to this rule. Howard Leonhardt and other Leonhardt;s Launchpads associated inventors have agreed to give startups within the accelerator exclusive rights organ by organ to their patents in exchange only for their equity stake in those companies with no further fees or royalties due other than those associated with every shareholder.
Q: Does Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads have any debt?
A: Howard J. Leonhardt forgave $2.7 million debt owed to him by U.S. Stem Cell, Inc. to get certain patent rights to key patents licensed free of charge onto startups within the accelerator. He also invested over $8 million of his own money to get the core technologies developed and off the ground. The Board of Directors of Cal-X Stars Business Accelerator, Inc,. agreed in 2014 in light of the above to record on the books $2 million owed to Howard Leonhardt at a 13% annual interest rate that is un-secured. The company will only pay this debt when cash reserves permit. Leonhardt has no collateral interest to protect the repayment of this loan. In 2014, 2015, 2016 the average interest and principal paid down on these loans annually was about $14,000. In 2017 this increased to about $60,000. There is another debt owed to Bruce Methven our securities attorney of about $38,000 and certain management team officers have recorded deferred salary on our books.
Q: How much capital did the company raise for its startups in 2017?
Q: Approximately how much did our micro bioelectric stimulator partner invest in the development of the implantable device?
Q: Approximately how much in National Science Foundation Small Business Innovation Research Grant support did our micro infusion pump technology partner Fluid Synchrony LLC receive to help develop the pump for our combination device?
Q: How many square feet of manufacturing and research space does our product development and manufacturing partner Biomerics have?
Q: How much has Leonhardt Ventures raised and put to work in developing startups and organ regeneration and recovery startups since its founding?
Q: What successful product/startup exits has the Leonhardt team been involved with in their history?
Q: How many clinical trials has the Leonhardt’s Launchpads full team been involved with during their careers?
Q: What patent protection to the startups within Leonhardt’s Launchpads have?
Q: How many issued patent and claims does founder Howard Leonhardt have and patent pending claims?
Q: How many patents has Leonhardt’s Launchpads and its startups licensed in from others?
Q: What products does Leonhardt’s Launchpads believe will be in human clinical trials in the next 12 to 24 months?
Q: Who is the company tax filing agent?
On what exchange is the company’s stock traded and what is the ticker symbol?
A: Cal-X Stars Business Accelerator, Inc. DBA Leonhardt’s Launchpads is a private company at this time and is not traded on any stock exchange yet.
What is the company’s fiscal year-end?
A: Our fiscal year-end always falls on the Sunday nearest to December 31.
Q: Who is the company’s transfer agent?
A: We handle all stock and option record keeping on our CapShare cloud based stakeholder management system with internal personnel.
Q: Where can I find the news updates and notices of upcoming meetings including shareholder meetings?
A: Our new page https://leonhardtventures.com/news/ is the best source as well as our LinkedIn, Facebook, Google+ and Twitter pages.
Q: Is an Annual Report currently available from Leonhardt’s Launchpads or Leonhardt Ventures?
A: Our Annual Reports may all be found on www.leonhardtentures.com