With the rapid spread of COVID-19 taking hold in the U.S. and across the world, publicly-traded stock prices have taken a beating.  Additionally, as business, economic, and political uncertainties increase, private valuations in certain types of securities and industries will certainly take a hit this year.  Although this may cause temporary pain in the form of lower portfolio and 401k balances, significant planning opportunities remain for high net worth individuals, business owners, and shareholders of privately held companies.

Take Advantage of the Exemption from Estate, Gift and Generation-Skipping Transfer Tax – With everything that’s going on, it’s easy to forget the significant changes that went into effect in 2018 with respect to the estate and gift taxes.  To summarize, the federal tax law was changed to allow individuals to transfer double the amount that was previously allowed over the course of their lifetime free of tax.  As of this writing, individuals may transfer $11.58 million and married couples up to $23.16 [Read more…]

 

March madness canceled. Ice hockey thawed. No baseball. Schools closed. Restaurants offering curbside pickup. Breweries doing delivery. Supply chain disruption. Hoarding. Entire companies working remotely. No toilet paper on the shelves! Trump. Congress. COVID-19 vaccine. Social distancing. Stay at home. Olympics delayed. N95 masks. SXSW scratched. Distance learning. Concerts delayed. Disney locked. Group meetings? Fuhgeddaboutit! The headlines sound like new lyrics to REM’s famous title “It’s the End of the World as We Know It.”

What does it mean for a Company’s business valuation? Coronavirus, or COVID-19, muddies business valuations for an indeterminable period. Many businesses will be adversely affected by reduced sales, uncollectible receivables, staff absences for a variety of reasons, increased costs of operating remotely, increased sanitation costs when out of the office work is not feasible, etc.

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As we navigate the ongoing impact of the Coronavirus, we are assisting our clients who are suffering from the loss of clients/customers during this time.  Below are several options for assistance currently available for small businesses in addition to information being given by the Maryland Department of Commerce and the CDC.  As more resources become available we will update this list.

• Sales and Use Tax in Maryland:
  • Businesses who paid their Maryland and Sales Use taxes for March early may request a refund of their payment by emailing taxpayerrelief@marylandtaxes.gov or by calling 410-260-4020
• SBA – Disaster Loan Assistance Business Disaster Loans – https://www.disasterassistance.gov/get-assistance/forms-of-assistance/4479

• • Businesses of all sizes, as well as private non-profit organizations, may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, and inventory and other business assets.
  • In some cases, SBA may be able to refinance all or part of a prior mortgage or lien. We may also be able to increase the loan up to 20% of the confirmed physical losses.
  • You could use the loan increase to make improvements that reduce the risk of damage by future disasters. This could include improvements like retaining walls, seawalls, sump pumps, safe rooms, and storm shelters.
  • The SBA offers Economic Injury Disaster Loans (EIDL) up to $2 million to help meet working capital needs caused by the disaster. The program limit for business loans is $2 million. This applies to all combined funding paid to a business and its affiliates for each disaster.
  • To qualify, your business or private non-profit organization must have physical damage or economic harm and be located in a declared county.

• SBA – Economic Injury Disaster Loans – https://disasterloan.sba.gov/ela/Information/EIDLLoans

• • The SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. Your loan amount will be based on your actual economic injury and your company’s financial needs, regardless of whether the business suffered any property damage.
  • The interest rate on EIDLs will not exceed 4 percent per year. The term of these loans will not exceed 30 years. The repayment term will be determined by your ability to repay the loan.
  • A business may qualify for both an EIDL and a physical disaster loan. The maximum combined loan amount is $2 million.

• Facebook – Small Business Grants Program – https://www.facebook.com/business/boost/grants

• • Facebook announced $100 million in grants for small businesses in a blog post on March 17.
  • They are offering $100M in cash grants and ad credits for up to 30,000 eligible small businesses in over 30 countries where they operate.
  • These grants can be used to keep your workforce going strong, help with rent costs, connect with more customers, and cover operational costs.
  • They will share more details as they become available.  You can sign up to receive updates in the link provided.

• IRS – Coronavirus Tax Relief – https://www.irs.gov/coronavirus

• • The Treasury Department and IRS just announced a three-month delay for any tax payments owed up to $1 million.
  • Returns still need to be filed by April 15, 2020 but will have until July 15 to pay.
  • This will apply to individual tax returns but should also cover many pass-through entities and small businesses.

• American Express Financial Hardship – https://thepointsguy.com/news/amex-waiving-interest-late-fees-accounts-requesting-covid-19-relief/

• • Amex is evaluating accounts on a case-by-case basis under its Financial Hardship Relief program to provide support for cardholders impacted by Coronavirus.
  • Interest rates may be lowered to rates as low as 0%, and you may receive a waiver on late and other account fees.
  • If you accept the relief, your accounts are frozen and may not be used further until they are paid off. Your Membership Rewards points are also frozen and cannot be used.
  • The issuer may notify the credit bureaus that your account limits were lowered.

• American Express Working Capital – https://www.americanexpress.com/us/business/financing/working-capital-terms/index.html

• • Amex business cardholders can enroll with no credit check and get ongoing access to funds used for vendor payments between $500 and $150,000 with repayment terms of 30, 60 or 90 days.
  • These charge a fixed fee between 0.6% and 5.25%.
  • Once enrolled, easily add vendors by providing their business and bank information. For your protection, they may need up to an additional 2 business days to verify the vendor information you provide.
  • Amex will send payment to your eligible vendor via ACH within 2 business days and make it clear the payment came from your business.
  • The amount you requested plus your fixed fee are auto-debited from your bank account at the end of the term.
  • Request to pay as many eligible vendors as you want, as many times as you want up to your available borrow amount.

• Chase – Fee and Interest Relief – https://www.chase.com/digital/resources/coronavirus

• • You can call the number on the back of your card and ask to speak with an account representative about the possibility of relief from fees and interest.
  • Several people have reported success in having interest and late fees waived due to hardship related to COVID-19.
  • They will also help you prepare and manage through potential business disruptions.

We will continue to update this information as more programs become available.

Evergreen Advisors, a middle market Investment Bank and Corporate Advisory Firm, with offices in both Columbia, MD and McLean, VA, is pleased to announce the acquisition of Baker-Meekins.  As part of the transaction, James Webb, ASA and Shawn Moxley, ASA will become employees of Evergreen and Ross Adams, CFA will serve as a consultant.  Based in Lutherville, MD, Baker-Meekins has been providing independent, expert opinions of the value of a business or its securities since 1987.

“We are very excited about the prospects of combining the experience, expertise and client base of the Baker-Meekins team with those of Evergreen.  James and Shawn are widely known in the business valuation community for their expertise in complex fair value and ESOP valuations.  They will be a tremendous addition to the group“, said Patrick Lowry, Managing Director of Evergreen’s Valuation Practice.

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The need for expert valuation services is increasing in today’s litigious environment. The valuation of closely-held business interests and related assets in the context of tax, corporate transactions and legal disputes is necessary to properly resolve matters and make key financial decisions.

In contentious situations such as divorce or shareholder disputes, it is typical for the parties to hire two valuation experts; one for each side.  However, opposing parties may jointly decide, in consultation with their legal teams, to use a neutral valuation expert (NVE).   In this case, a neutral appraisal is completed for parties with opposing interests by an independent third-party appraiser or valuation expert.

How can a neutral valuation expert assist you?

1. Reduce Financial Uncertainty and Suspicion – The NVE has the expertise to identify the necessary and appropriate data required to ensure full disclosure of all relevant financial information including, financial statements, tax returns, and other bank, investment and retirement plan account data. Trust increases when clients are comfortable that a complete financial picture has been presented and any questions have been asked and answered.
2. Provide Fair Access to Financial Information – Specifically, in a divorce setting, the NVE can alleviate the non-money spouse’s financial suspicions and concerns. In many cases, one spouse handles the family’s finances or holds equity interests in privately-held companies. A lack of familiarity with the family finances contributes to angst and uncertainty about the future. The NVE may educate the spouse who has not been intimately involved with the finances. The increased education and understanding diminishes some of the anxiety and concern.
3. Independent Opinion – Since the NVE is independent, the parties are more likely to reach an agreement. The NVE can help clients evaluate the various financial options under consideration and explain how those decisions impact both parties and the valuation outcome. Information about the implications of various terms from the NVE provides the parties with the confidence to make decisions and reach an agreement.

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Rick Kohr was recently interviewed at the Maryland Life Sciences’ first annual Bio-Innovation Conference, which was held on October 7, 2019. Marty Rosendale, CEO of MTC and host of the Capital M podcast, sits down Rick to discuss access to capital in Maryland and the Mid-Atlantic. He discusses what investors are looking for when meeting new companies and how his company prepares others for raising capital. 

The Bio-Innovation Conference provides a forum for professionals from industry, academia, and government to discuss trends and insights into Maryland’s growing life sciences industry while showcasing the state’s and region’s innovations and successes in the life sciences industry. The all-day event attracts more than 400+ top life science professionals.

Listen Here

 

The cybersecurity industry will continue to remain a growth industry with the internet and its related threats routinely appearing in various new forms. Security is continually evolving — what worked to protect the internet user a year ago is not effective today.

This year has brought a flood of new venture capital funding in cybersecurity, following up on the approximately $5.3 billion invested in 2018. The industry continues to see capital pour into companies competing in the SaaS Monitoring & Security vertical. Going back to the third quarter of 2016 there have been more than forty deals funded every quarter, except two.

However, cybersecurity was more recently listed fifth in investment dollars behind other emerging markets – Artificial Intelligence, FinTech, Digital Health and IoT. Cybersecurity deal activity dropped to its lowest level since the fourth quarter of 2018. There were 63 deals funded in the third quarter, totaling $1 billion..

Read more Here in the I95 Magazine

Evergreen Advisors, LLC is pleased to announce that George Davis will be joining the firm as Executive Vice President, Strategic Advisory. Strategic Advisory. George is well-known for his successes in investing, building and managing biotech, IT, and software companies, often from the start-up stage. He recently completed a 2-year tenure as Executive Director and CEO of Maryland’s Technology Development Corporation (TEDCO), the State’s Technology Transfer, Innovation Development and Venture Investing Platform. With over 30 years of management experience, having served in various C-level positions, including President and CEO of publicly traded companies, George offers a broad range of experience and business acumen.

“George brings tremendous wisdom, experience, strategic insights and network to the firm and our clients,” says Rick Kohr, founding member and CEO of Evergreen Advisors. “Most importantly, he’s a perfect fit for Evergreen in terms of our reputation for strategically guiding clients to meet their goals. We’re thrilled to have George and his track record of helping companies generate accelerated, profitable growth across many industry verticals.”

About Evergreen Advisors

The Evergreen Advisors, LLC is a leading investment banking and corporate advisory firm focused on assisting emerging growth and middle-market companies in the areas of corporate finance, growth and exit strategies, business valuation and advisory services. Providing innovative and strategic solutions team, the team has completed over 100 M&A and capital raising transactions, totaling over $5 billion in value for publicly traded and privately held companies. For more information, visit www.evergreenadvisorsllc.com

This month Rick Kohr, CEO of Evergreen Advisors is featured in The Business Monthly with a Q&A on venture capital.

With the venture capital market hopping with big money deals and his company planning a (partial) move to the South Baltimore’s glitzy Port Covington project, Rick Kohr, the founding member and CEO of Columbia-based Evergreen Advisors, is at a juncture in his career. That means Kohr, who has more than 30 years’ experience in advising early stage growth and middle-market companies has plenty to talk about.

 What are the trends in venture capital (VC) today?

First off, we’re seeing a very robust market. Going back to 2014, it was very strong in terms of investment in the U.S., where we’d gone from $71 billion of invested capital to $132 billion in 2018; this year, the first quarter was $32.6 billion in the U.S., which was down 36 percent from last year…..

Read more on page 8 here: http://www.bizmonthly.com/wp-content/uploads/2019/07/aug_Web_pages-reducedsize.pdf