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Heartland Bridge Capital, Inc.
www.heartlandbridgecapital.com
Heartland: the perfect play to profit from America's new energy policy.
With gas prices so high our economic recovery is threatened America at last is being forced to move toward lessening our dependence on fossil fuel and foreign oil. Led by colorful energy innovator Jim Groelinger, Heartland Bridge Capital (HLBC.OB) is the perfect way to profit from America's new energy policy. In the thick of the action, Jim says, "We need to take more control of our energy future. I hope you join us!"
By Robert J. Flaherty and Brian D. Flaherty
OTC BB: HLBC
Recent Stock Price: $3.00
February BUY Price: $3.15
52-Week Price Range: $3.27 - 2.00
Shares Outstanding: 16.2 million
Estimated Float: 2.4 million
Stock Market Cap: $49.3 million
Average Daily Share Trading Volume (3 month average): 1,979 shares
Energy Technology will Create a Brighter Tomorrow: Moving almost in a blur, Jim Groelinger has been traveling from city to city to hear technology presentations. Bright driven entrepreneurs of private start-ups are developing technologies which involve how to make America's energy use cleaner, more efficient, cheaper and sustainable.
His travel is not just because he is chairman, president and CEO of Heartland Bridge Capital Inc. (HBLC.OB), a public private equity firm focused mainly on energy and creative energy- oriented waste disposal. Since 2009 Jim's other role as Executive Director of a national association of clean energy incubators Clean Energy Alliance, Inc. keeps him in perpetual motion.
While learning about the efforts of private entrepreneurs across the land, Jim has been thrilled by the creativity and the opportunity for profitable investment in these private start-ups.
A native New Yorker who has bought, sold and analyzed hundreds of energy concerns over his long consulting and management career, Jim felt excited to explain how the investment philosophy of Heartland fits in with the emerging and growing energy needs of our country, especially the energy policy recently espoused and promulgated by President Obama.
Flaherty Financial News President Brian Flaherty conducted three separate video takes with Jim for a talking head interview now posted on our website. What follows below is a composite of Jim's comments from all three takes ending with the two quotes we liked best but which didn't make the video.
"For many years we have been struggling in America trying to decide which is the best source of energy. We now have solved that dilemma in the President's answer 'All of the above!' President Obama went on to add, 'We can't just drill our way out of the problem. While we consume 20% of the world's oil we have just 2% of the reserves.' That realization enables us as a company to feel confident that by developing a wide range of energy alternatives we will be in a direction that is consistent with the country's policies and consistent with good business. Personally I've been in the energy business for more than 40 years and have seen policies and technologies come and go. Today we just are amazed and excited at the wide range of energy opportunities in front of us and the range of investment potential that is open and available to Heartland.
We are looking at energy investment opportunities that range from saving energy or conserving and reducing energy consumption to producing alternative sources that are green, clean and economically attractive.
Today we are looking at technologies from all over the country. They involve both the production of new sources of energy and to me very excitingly the reduction of energy consumption and saving energy through conservation and recapture of waste energy. These areas were not high priority for many years because the economics did not appear attractive.
Going back to my early days in the late 1960s as a chemical engineer in a large steam plant anything that went out the stack was money that had been spent that was not being captured. Today energy recovery technologies particularly fostered from advances in digital technology that allow capturing waste energy streams that could not be captured earlier open up new opportunities. We are actively pursuing them.
We are looking at biomass (energy from waste) and bioenergy (energy from organic material). These are particularly important to the country. The U.S. Military, the largest individual user of energy in the nation, is very focused on becoming a strong user of bioenergy and alternatives so that the security of field troops is enhanced greatly as the amount and transport of dangerous liquid fuel is reduced.
I'm excited to lead Heartland in the direction of enhancing energy opportunities and investments in a way that is consistent with the needs of the country and the stated energy policies that are now evolving. We will do that in a way that will enable us to make very good investments that will have very attractive returns in technologies and business that do not rely on national subsidiaries to make the investments worthwhile.
Subsidies (like $4 billion annually to oil and gas) have become an area of great discussion and controversy. I personally believe that leveling the playing field will allow many energy alternatives to become extremely attractive and be utilized in ways they have not been before.
We need to take more control of our energy future. I hope you join us."
Our Opportunity
Only 16 months old and just getting started, Heartland's ambitious goal in 2012 is to raise $10 million and to make at least six more acquisitions especially in the hot field of the energy technology. Heartland's management team has the contacts to find and acquire great new energy technology, the kind that can be a game changer in a huge market. So, the next acquisition could be the one that eclipses all of its past investments. Any new acquisitions will join with its four current investment holdings: Legends & Heroes where its revolutionary sliming Skineez Skincarewear healthy apparel is about to receive national attention, Myself®, to help 20 million American women combat incontinence, HepatoChem, whose small molecules mimic the liver to speed up drug research, and Heartland's patented Medical Applicator whose first product prototype, a tampon breakthrough, is about to be presented to the major players.
History shows that private equity investments made during times of market distress have produced superior returns. Today is one of those rare flight-from- risk moments.
Many successful private companies are encountering tremendous difficulty in financing their growth. This was a major factor spurring the creation of Heartland in 2010. "It was the perfect time to help these emerging companies because they can't get money any other way," said a source familiar with Heartland's business plan. "The only other option these target private companies have is for some venture capitalist to fund them and take 90% of the company away from them."
This is the perfect moment to back and bet on a team which is just coming to bat and is focused mainly of helping and profiting from the enormous transition ahead as America rationalizes its future use of energy. Heartland also plans to participate in advancing life science medical technologies which will produce undreamed of improvements in better quality of life for all the people on our planet. These are two of tomorrow's best growth arenas.
Heartland's proven management led by veteran Jim Groelinger has a superior vantage point to identify numerous private energy technology winners which will profit from America's new energy policy. His team will also benefit from improving its existing four investments. The goal of a Flaherty Special Situation is a gain of 50% to 100% within two years. We believe that the stock of Heartland Bridge Capital can double those gains!
A Rare Public Private Equity Firm
Mahwah, NJ-based Heartland Bridge Capital, Inc. is a rare primarily energy-oriented public private equity firm. This start-up functions as an investment and operating company, providing equity, acquisition debt or bridge financing to emerging high growth enterprises or entrepreneurs. To maximize the value of its investments, Heartland also supplements the capabilities of its investment companies in non-financial areas to help them achieve their potential.
Its proven veteran team has commenced looking for new acquisitions and building a portfolio of investments in emerging private companies with proven or late-stage technologies. Each must have a strong entrepreneurial management that is dedicated to creating positive changes in the world.
Heartland's primary interest currently focuses on three main areas: clean energy technologies and efficiency (including alternative and renewable energy), waste management technology and reuse and medical technology. In addition Heartland's investment philosophy is based on investing in companies that provide a social benefit aimed directly and tangibly at making people's lives better. Management's goal is for each new deal to be a win, win for everybody.
There are enormous private equity investment opportunities waiting for those who want to play a part in developing alternative sources of energy and better ways of disposing of waste or turning it into energy as part of a clean, more efficient, more affordable, more energy independent America with a safer environment.
The rewards will be great for the experienced pros like Heartland, who over a period of three to five years, aim for a minimum a 10-fold return (1,000%) on every new investment. Heartland's management team is experienced in finding diamonds in the rough, polishing them to their peak value and then harvesting them one way or another. If some turn out to be cash cows, Heartland may hold on to them and use the cash flow that's coming in to buy more companies. If others have grown to a certain point and attract a suitor that wants to buy a company at the right price, Heartland would likely sell. A public offering in a winner with a carried interest for Heartland would be another possibility.
This rare energy -oriented private equity firm start-up is publically owned and offers the everyday investor an opportunity to invest like the ultra-rich. An investor can participate in diversified private investments with the potentially attractive 1,000% gains and risk/reward profiles sought by hedge funds but at an investment level that is manageable for the average investor.
Why Invest Mainly in New Energy Technology?
Because the largest and most important investments Heartland will make should be in the future, let us look at how CEO Jim Groelinger outlines the three major areas for new investment. The first is energy technology.
Without new technology to meet the world's growing energy needs, the world's population could not continue growing. Global rising increases in productivity and living standards would come to a disastrous halt as they did in the Middle Ages. For example, a few American cities have gone dark at night!
Few investors look ahead to see what is happening. Soaring global population is putting strain on the availability of basic resources and energy and degrading our environment and the air we breathe and the water we drink. So new technology must help the world to become more efficient and less wasteful. Opportunities in energy generation, transmission, utilization and efficiency will be winners. New ideas for water purification and grid optimization and monitoring are all essential.
Our dependence on foreign oil and periodic interruptions from oil supply cut off threats in the unstable Middle East and soaring gasoline prices which threaten to shut down our economy are problems America can no longer ignore. We cannot delay taking more control over our energy future.
Waste management is another energy-related economic sector that is of primary interest to Heartland. The amount of waste in the U.S. continues to rise. According to the U.S. Environmental Protection Agency, the U.S. generated 250 million tons of waste in 2008. About 54% of this trash, or 135 million tons, currently ends up in landfills and is consuming land at a rate of nearly 3,500 acres per year. Consequently, this rapid growing of waste is creating investment opportunities in development of new technologies for waste management and treatment. For example, the process of plasma gasification is used to convert organic waste into fuel gas that creates electricity. These new technologies offer new opportunities for waste disposal, and more importantly for renewable power generation in an environmentally sustainable manner. Biological decomposition and reprocessing is also being examined in a growing scale.
What's Happening Right Now!
Each of Heartland's four current existing investments has the potential for big payoffs. They are Legends & Heroes where its revolutionary sliming Skineez Skincarewear healthy apparel is about to receive nationwide publicity, Heartland's patented Medical Applicator whose first product is a tampon breakthrough about to be presented to the major tampon players, HepatoChem, whose small molecules function like an artificial liver to speed up drug research, and Myself®, a home use biosystem to teach 20 million American women how to property do the Kegel exercises to combat their incontinence.
Legends & Heroes: Attractive models at the upcoming LA Fashion Weekend in Los Angeles March 16th through the 18th will stand out not just for modeling glamorous versions of their creative revolutionary Skineez Skincarewear™ healthy compression apparel garments but also because each will be holding a can of spray. After about 10 washes spray your Skineez clothes with Skineez Sliming Spray ($25) and the curative magic and built-in skin benefits are back at work, as the spray replenishes the curative properties of the clothes.
Some famous Hollywood moms like Tori Spelling and Pink are fans. This is unique: Skineez are the first doctor, orthopedic specialist and plastic surgeon recommended garments on the market.
Heartland is set to benefit from the mass-market launch of Skineez™ Skincarewear™. This health and wellness apparel line for women is owned and operated by Legends & Heroes in which Heartland is in the process of acquiring a 25% equity stake. Skineez features a patented new technology that weaves the garments with microcapsules that moisturize and smooth the skin while a person wears them. Each microcapsule, designed to protect the ingredients inside, is a balanced combination of anti-cellulite ingredients (retinol, caffeine, red algae extract) with natural-based moisturizing ingredients (shea butter, apricot kernel oil, rose hip oil, vitamin E). The special fabric is treated with the microcapsules during the manufacturing process and can be replenished after washing up to 10 times with the Skineez Sliming Spray. When the garment is worn, the body's heat and the friction from wearing the garment slowly release the patented embedded cosmetic ingredients onto the skin. A person can lose weight by just wearing the product and it can even be worn in bed while you are sleeping. Lose while you snooze!
According to the website www.myskineez.com. :"If a woman wears it eight hours a day, she is will lose weight and inches. The elasticity of her skin will increase by 19%. Skineez products will be available in thousands of stores and pharmacies in time for Mother's Day. They have been sold on the Home Shopping Network, in Sears-Canada and some of the high-end department stores. And a man's version will be coming out as well.
By May 1st items are expected to be in approximately 3,000 well known stores all across the country. It will be the first time that a textile company will be supported by surgeons, through medical channels and as recommendations for retail sales. The idea of wearing clothes with curative properties that make you healthier and help you lose weight while you sleep should be a big winner.
Heartland's Patented Medical Applicator: prototype of first product, a tampon breakthrough, about to be presented to the major tampon players. In December 2010, Heartland acquired certain assets including a patent application for a novel medical applicator that is capable of delivering medicines and internal devices within the body without producing injury or damage. The medical applicator has a number of uses including translumenal (within a blood vessel or an existing body cavity) delivery of arterial repair devices such as stents and grafts, insertion of analgesics and other medicines to specific locations within a body orifice or vessel.
Besides other exciting long run applications, the use of the applicator technology as a vaginal tampon delivery device offers the largest and nearest-term commercial potential due to the large existing tampon consumer market. The advantages for the new tampon include easier and pain-free insertion, superior disposability (flushable/biodegradable) and smaller size at a cost equal to or less than current plastic applicators.
Heartland is preparing to start presenting prototypes of its tampon delivery technology to the major consumer product tampon marketers. Heartland's management team has the connections and experience in this area to reach the decision-makers in the key companies. Any deal could be done in a relatively short period of time.
This is a huge opportunity! According to Population Reference Bureau, the potential number of worldwide tampon users is about 1.6 billion women. In the U.S., tampon sales in 2006 were valued at $577 million (excluding Wal-Mart sales). As in the U.S. and Canada, 70% of women in Europe use tampons over sanitary napkins making for a similar market opportunity in the European Union. Over 90% of tampon customers in the U.S. prefer applicator-equipped tampons compared with 30% of European women. Historically, annual growth rates for the tampon market in North America and Europe have been in the 2% to 4% range over the past few years. Tampon sales outside of Europe and North America are expected to increase as living standards improve. Increasing prosperity will allow more women the option of choosing tampons over inexpensive pads. Experts predict a market growth rate in the high single digits for the industrialized Asian countries.
HepatoChem: Heartland recently made an initial investment of $100,000 in biotech firm HepatoChem pursuant to a definitive investment agreement to provide up to $400,000 of equity capital. Based in Cambridge, MA, HepatoChem is an exciting privately-held company that offers pharmaceutical and biotech companies a reliable and efficient means of accessing small molecule metabolites in quantities needed in the drug development process. The technology uses biomimetic catalysts to mimic the metabolic function of the liver. As a result, it enables the production of metabolites more quickly and with greater cost-effectiveness than any other technology currently available.
Put in layman's English HepatoChem can help speed up drug testing and reduce research and development costs. This unique technology was developed in collaboration with Professor John Groves at Princeton University.
HepatoChem sales for 2012 are projected to rise from around $392,000 in 2011 to over $2 million and the company should break into the black. By 2012 projected revenues are $11.3 million and profits $2.4 million unless Heartland acquires companies which could enhance operations.
Myself®, a home use biosystem to help 20 million Americans to combat their incontinence: Heartland purchased the right to receive cash distributions over five more years based on the sales of the Myself® pelvic muscle trainer, which is owned by the secretive Big-Board marketing maven Jarden Corporation (NYSE:JAH-33.69). This large consumer products company has over 100 brands including personal care and wellness products. Heartland owns 60% of the revenue stream and stands to receive annual multi-million dollar payments if Jarden is anywhere near as successful at marketing the Myself® pelvic muscle trainer as Jarden has been in virtually all of their other product lines. Right now Myself® is mainly sold on line at www.themyselftrainer.com.
The Myself® pelvic muscle trainer is the first FDA cleared, non-prescription product available direct to the consumer for the treatment of female incontinence. The product is a home-use biofeedback product with proprietary technology that allows a woman to successfully strengthen her pelvic floor muscles on her own by using kegel exercises. In addition to urinary incontinence, the Myself® product is an effective therapeutic choice for a number of other pelvic floor weakness-related conditions affecting millions of women. These include conditions arising out of pregnancy, menopausal symptoms, pelvic organ relaxation and female sexual dysfunction.
According to various market studies related to female incontinence, one out of three women experience urinary incontinence at least once a month, over 40% of women experience sexual dissatisfaction , an estimated 37 million women suffer from menopausal symptoms, approximately 15% of women from age 18 to 50 experience chronic pelvic pain and more than 95% of adult women suffer from occasional vaginal dryness or more frequent vaginal discomfort symptoms
Undoubtedly, these statistics underscore this fact. The marketplace for female incontinence medical devices, especially ones that can be purchased over the counter and used at home for such a personal matter, is substantial. It is estimated that the prevalence of female incontinence rises to about 30% to 40% of all women around middle age. It then steadily increases with aging (up to 50% in elderly women). These statistics, combined with the fact the U.S. Census estimates that the number of women over 40 in the U.S. will increase from 63 million today to 80 million in 2020, point to a very significant market potential for the Myself® product.
A phoenix of a company which rose out of the bankruptcy ashes of the old Chain Saw Al's Sunbeam, Jarden is very secretive. FFN's attempts to learn if Jarden had a launch date for a major marketing campaign to expand sales of Myself into retail stores went unanswered. So this dark horse could pay off in royalties of over $50 million for Heartland or much less depending on when Jarden aggressively markets the system and how successful they are.
The potential for great success is there. Here are testimonials from just two women. "It has given me my freedom back to do the things I like to do and not have to worry about where the bathroom is."
"I can see there really has been a life-changing difference since I started using it."
Management Will Share the Gains and Pains
(Unlike many investment funds in which management is unduly compensated even after poor performance, Heartland's compensation will be modeled with a modest base linked with performance-based incentives. So management and investors should be sitting on the same side of the table.)
James F. Groelinger, 68, Chairman, CEO and President, has been chief executive officer since November, 2010. Since 2007, Groelinger has been the managing director at Bellegrove Associates where he provides strategic guidance to emerging clean energy entrepreneurs and companies. This guidance includes, but is not limited to, evaluating potential energy-related investments, assisting inventors with energy-related patents and products, as well as developing strategies for creating joint ventures between U.S. and foreign entities or governments. Since 2009, he has also been the executive director of Clean Energy Alliance, Inc., a national association of clean energy incubators for the purpose of fund raising, policy development, and strategy. From 2001 to 2006, Groelinger served as CEO and a director of EPV Solar, Inc., a photovoltaic technology company that developed a technology for the production of thin-film photovoltaic products. As CEO of EPV Solar, he saw sales increase from nil to more than $20 million annually, developed products sales in the U.S., Germany, and Spain, oversaw joint ventures with foreign manufacturers, and managed a complex $60 million debt-for-equity recapitalization. This set the stage for a $70 million third-party financing and an initial public offering, which never took place because of the collapse of Lehman Brothers. A native New Yorker, Groelinger received his Bachelor of Chemical Engineering from the City College of New York, and his MBA in Finance from Temple University. He has an ideal background to screen alternative clean energy and creative waste disposal ideas.
Frederick Larcombe, CPA, 55, serves as chief financial officer and secretary. From early 2008 to the present, Larcombe, as a principal with Crimson Partners which is a group of seasoned financial professionals, serves a number of clients primarily in the life sciences. In this connection since September 2009, he has served as the CFO of iBio, Inc., a biotechnology company focused on commercializing its proprietary technology for the production of biologics including vaccines and therapeutic proteins. From 2005 to 2007, he was simultaneously the CFO of Xenomics Inc. and FermaVir Pharmaceuticals, Inc. From 2004 to 2005, he was a consultant with Kroll Zolfo Cooper, a professional services firm providing interim management and turn-around services. From 2000 to 2004, he was CFO of MicroDose Therapeutics. Prior to 2000, Larcombe held various positions with ProTeam.com, Cambrex, and PriceWaterhouseCoopers. He received his BS in Accounting from Seton Hall University, was designated a certified public accountant in New Jersey, and is an alumnus of the Management Development Program at Harvard Business School.
Wayne LeBlanc, 64, is senior managing director for Business Development. Since 1999, LeBlanc has been a managing partner in Solutions for Energy Management where he has been involved in brokering electricity to large customers and serving as a consultant for demand side management. He is also currently a managing partner in eMEDiSAFE, a company formed to address the recent requirements to convert to electronic medical records to reduce health care costs. From 2007 to 2008, LeBlanc was vice president of Business Development for EPV Solar. From 2000 to 2004, LeBlanc was a founder of Utility Choice Electric, the first independent retail electric provider in Texas.
Frederick A. Voight, 54, is managing director of investments. Voight has been the managing director of, a private investment fund since 1994, during which time he has made successful investments in numerous companies and products, focusing on the areas of life sciences, renewable energy and green technology. Voight has more than 20 years of experience in managing these types of investments. He previously served as chairman and CEO of a public company and has served as a director of several public and numerous private companies.
Heartland's Advisory Board
Dr. Magdy Abdel-Malik: He is the first and so far only member of the Advisory Board which will help screen potential investments. Dr. Abel-Malik is a highly reputed corporate innovation leader with extensive R&D and business development experience in the medical field. His experience, combined with an unwavering commitment to innovative thinking aimed at implementing the strategic vision needed to source, evaluate, acquire and commercialize best-in-class life science emerging technologies, will help accelerate Heartland's growth initiatives. He currently serves as founder and president of Quaestio Global Partners, a management consultancy in health care and life science. Previously he served as Director of Global External Opportunities at Pfizer Consumer Healthcare.
Risks
In 2012 Heartland is hoping to raise $10 million in order to be able to invest in at least six targeted companies. Failure to raise significant additional capital would significantly impact its growth plans. Future success will also depend on its ability to select winners among thousands of promising private entrepreneurial investments.
America has lacked a long-term resource and energy policy. Instead Congress and our leaders have been held as pawns by the pro-fossil fuel, anti-regulatory powers which do not want to see alternative fuels and renewable energy sources developed at the expense of currently subsidized oil and gas. While America should be trying to become a leader in clean energy investments that will create jobs and keep America competitive in advanced energy technologies, short-term oriented lobbyists and servants of the status quo may slow down or even block many promising ventures.
While these are very real risks, we also feel investors are fortunate in getting a ground floor opportunity to participate in private company breakthroughs in energy and life sciences with real pros in private equity investment. The latter so often is monopolized by privileged institutional investors such as Harvard University.
CONTACT INFORMATION
Heartland Bridge Capital, Inc.
www.heartlandbridgecapital.com
James F. Groelinger, Chairman, President and CEO
1 International Boulevard, Suite 400
Mahwah, NJ 07495-0027
Phone: 201-512-8732
Fax: (518) 252-3917
Investor Relations
Tom Bustamante, managing partner
Ludlow Capital, Inc.
Phone: (347) 483-0121
ludlowcapital@aol.com
Coming Attractions: Last year's annual Flaherty's Famous of the Famous issue was opened by 3.3 million online readers! Will the combined portfolio of our proven pros favorite stock picks last year beat the S&P 500 for the 12th consecutive time or will our fabulous streak end? The race is too close to call. But whatever the outcome after the latest 12 month's gains or losses are finalized on St. Patrick's Day you will see over a dozen new favorite stocks for 2012 when our new Favorites of the Famous issue comes out afterwards. The combined portfolio of our guest panelists ranks as the best long run performance of any regular favorite stock feature anywhere on the planet.
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