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BWCC EDIF_Master_Finalv2 (BWC edits)

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Published by cogic4ever, 2017-09-21 19:37:11

BWC CAPITAL

BWCC EDIF_Master_Finalv2 (BWC edits)

in·fra·struc·ture

noun
1. the basic physical and organizational structures and facilities (e.g., buildings, roads, and
power supplies) needed for the operation of a society or enterprise.
Source: Oxford dictionary

BWC Capital recognizes that …
Infrastructure facilitates growth, and where infrastructure exists, so too does opportunity.
This is true for economic development, for which adequate infrastructure – e.g. roads,
water and sewerage systems, electric power, etc. – is a necessary input for fostering
sustainable economic growth. This is true also for people, for which opportunity
infrastructure (e.g. access to employment, transit options, healthy and safe communities,
etc.) enhances the overall quality of life for individuals, families, and communities.
Infrastructure is about more than steel and concrete, it’s about people too.

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We create value beyond just providing capital.

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Laying the Foundation for Opportunity, Economic Inclusion, and Transformative
Revitalization

BWC Capital believes that expanding opportunity for underrepresented professionals in the economic development
space enhances the overall landscape of investment opportunities. It is this belief that led to the creation of BWC
Capital – a minority-led private equity firm that seeks attractive investments that promote opportunity and
economic inclusion. Changing demographics in the U.S. highlight the need to build out the pipeline of
underrepresented talent within the broader economic development landscape. Cities and towns – in urban,
suburban and rural settings – across the U.S., aggressively seek opportunities to build out infrastructure (e.g.
transportation, housing, sports and entertainment amenities, public amenities, etc.) that offer a unique and
enhanced quality of life that will attract individuals, families, businesses, and visitors. As such, Increasing the
representation of talented and experienced minority and women professionals will serve cities, towns, and local
communities well in addressing the challenges and opportunities they face in identifying and pursuing economic
development initiatives that promote broadly shared growth.

It is our deliberate focus on pursuing investments that expand opportunity and economic inclusion that in part
differentiates us within the private equity space. Through our investment endeavors, we seek triple-win outcomes
that: (1) produce attractive financial performance for our investment partners; (2) fill a persistent access to capital
void for attractive, but difficult-to-finance investment opportunities; and (3) contribute to developing a more
diverse pipeline of experienced professional practitioners along the economic development continuum.

Our Investment Philosophy

Our approach to investing is straightforward: keep it simple. For BWC Capital, this means identifying investment
opportunities that our partners can easily understand and get their minds around. This approach also means we
don’t chase “unicorns”, or the next billion-dollar tech startup, but rather seek bread-and-butter oriented
investment opportunities that fit within our investment strategy, make sense, and are supported by sound
evidence and convincing trends.

Our investment strategy targets growth-oriented investments that align with broader economic development
trends that drive growth, create jobs, and create access to opportunity for underserved communities. The
investments that we pursue typically entail hard assets (e.g. real estate, business assets, etc.), which provide
tangible collateral that minimizes investment risks and, in keeping with our keep it simple approach, present
something our investment partners can see and touch.

What We Offer as Investment Partners

BWC Capital leverages nearly 50 years of combined knowledge and experience among its partners in
entrepreneurship, asset management, banking, economic development finance, business strategy, and public-
private partnerships to add strategic value to our portfolio of investments. Known for our results and commitment
to exceeding client expectations, BWC Capital has established a solid track record of excellence in:

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• Driving capital to attractive growth-oriented economic development and business initiatives in
underserved areas in the United States. These investment opportunities typically are unable to secure
traditional financing.

• Using specialty financing tools such as the federal New Market Tax Credit (NMTC) Program to lower the
overall cost of capital for high-potential, but difficult-to-finance projects – providing “but for” capital
that makes such projects viable investment opportunities.

• Leveraging professional expertise to structure and remove real and perceived barriers to close financing
for deals. Without our involvement in paring non-traditional financing structures with traditional
financing and effectively managing post-financing activities to ensure execution of investment strategy,
prospective investment deals would likely not be completed.

• Facilitating public-private partnerships for economic development initiatives that aim to revitalize and
stimulate economic vitality in secondary cities and towns within the U.S.

• Identifying opportunities to engage minority- and women-led business entities in executing our
investment strategy. This is our deliberate effort to increase diversity and expand access to opportunity
within the economic development industry.

Important Information and Disclosure
This material is for informational and discussion purposes only, is subject to amendment and updating, and
does not constitute an offer or solicitation to buy or sell any securities. Past performance is not an indicator
or guarantee of future results. This presentation is not intended to be, nor shall it be construed as, investment
advice or a recommendation of any kind. This presentation is not complete and is subject to the more complete
disclosures, risk factors and other terms and conditions that will contained in the Fund’s Confidential Private
Offering Memorandum and other related offering documents. Under no circumstances may a copy of this
presentation be shown, copied, transmitted or otherwise given to any third person other than your financial,
tax and investment advisors.

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BWC Capital Leadership Team

Bridget Chisholm, Managing Partner, is an established expert in structuring public-private financing for
capital projects targeted to strengthen urban communities. A 25-year corporate and
entrepreneurial executive, Ms. Chisholm brings innovative, bold and practical financing
insight that actualizes her client’s vision. Ms. Chisholm gained her initial experience in
public financing while serving as a Shelby County Commissioner. In this role she helped
secure the largest bond issue for the FedEx Forum ($250 million), as well as Memphis’ first
Tax Increment Financing (TIF) project, Uptown. Since 2008, her innovation and

entrepreneurial acumen have led to over $500 million in multi-‐layered financing transactions, restructurings
and developments in the midst of the nation’s economic downturn.

Ms. Chisholm holds a Bachelor of Arts degree in Economics from Wake Forest University and an MBA from
the Wharton School of Business. She currently serves on the North Carolina State Banking Commission and
on the High Point University Board of Visitors.

Elmer Chisholm, Partner, is an entrepreneurial-minded executive with more than 15 years of experience
in retail, banking and sales. In prior roles, he has applied his growth- and results-focused
approach along with expert knowledge of business financing tools to execute business
strategies, which has entailed: managing oversight of multiple consolidations through
periods of M&A and reorganization; fostering positive public relations while building brand
value; and portfolio management expertise, which includes origination, underwriting,
collections and compliance. Elmer has received multiple awards for sales, service and

operational excellence.

Mr. Chisholm holds a Bachelor of Arts degree in Economics & Sociology from Duke University and an MBA
from New York Institute of Technology. He is a member of Alpha Phi Alpha Fraternity, Inc., the Iron Duke
Alumni Association, and serves as a member of the HUB Advisory Board for Guilford County Schools.

Cedric Johnson, Partner, brings a decade of knowledge and expertise regarding the
intersection of government, business and economic development. He has served in public
policy analyst roles at think tanks where he conducts research and analysis on fiscal and
economic issues, tracks key economic performance trends, and follows economic
development best practices. Cedric works on economic development projects of various
scope and scale, providing feasibility and economic analysis as well as strategic business
development advisory. He has worked with entrepreneurs, startups and emerging enterprises seeking to
raise investment capital for their respective ventures.

Mr. Johnson holds a Bachelor of Science degree in Economics from Clemson University, a Masters of Public
Policy degree from Harvard University, and an MBA from UNC Chapel Hill. He is an alumnus of Leadership
North Carolina and is a current member on the Durham City-County Planning Commission and Durham’s
Transportation Advisory Board.

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A 21st Century Economic Development Infrastructure Fund

BWC Capital (“BWCC”) seeks to launch a $25 million Economic Development Infrastructure Fund (“Fund”) that
will make investments in growth-oriented businesses and economic development initiatives that expand
opportunity and promote economic inclusion in underserved areas within U.S. towns and cities. Fund
investments will include certain characteristics and features:

• Growth-oriented operating companies that seek capital for business growth and expansion investments
that will spur positive economic outcomes (e.g. job creation) in underserved areas within U.S. towns and
cities;

• Investments that drive capital (private and non-private) to economic development initiatives and spur
economic growth in underserved areas within U.S. towns and cities;

• Growth-oriented minority-led emerging businesses seeking capital for business growth and expansion.

Track Record of Success

The Fund provides BWCC a platform to address opportunities outside the scope of BWC Consulting. BWC
Consulting is a boutique economic development advisory and financial consulting firm in existence since 2005. In
response to the strong demand and widening gap for access to capital by emerging- and growth-oriented
businesses and economic development initiatives, the partners at BWC Consulting determined that now is the
right time to launch a strategically focused Fund.

BWC Capital management’s experience providing economic development consulting and financial advisory
services to clients in the public, non-profit and private sectors for more than a decade uniquely positions the
Fund for success. With expertise structuring financing for client projects that incorporate federal New Market
Tax Credits (NMTCs) and other economic development incentives, BWCC has access to a steady flow of
prospective NMTC-oriented investment opportunities for the Fund. Structuring and executing these investments
require specialized knowledge and expertise, which BWCC management possesses, that limits the presence of
players in this niche investment space.

For 2017, BWC Consulting has delivered nearly $16 million in NMTC equity into NMTC-oriented projects that total
$60 million in aggregate overall financing – representing an average NMTC equity infusion of approximately 27
percent of total project financing, which lowers the overall cost of capital for respective projects. BWC Consulting
also identified other funding vehicles that further enhanced the returns and viability of these projects. The
expertise and ability to design creative financing solutions for attractive investment opportunities that are
challenged with securing traditional financing positions BWCC and the Fund to deliver attractive financial
performance.

Why Invest in the Fund

BWCC’s commitment to expanding opportunity to more minority and women professionals along the economic
development continuum differentiates the firm and the Fund within the alternative investments space. Our belief
in expanding access to opportunity is informed by the success of BWC Consulting, which has been made possible
in part by the willingness of stakeholders in the economic development space to partner with the firm and allow
us to demonstrate and deliver our value-add expertise and services. We remain grounded by this journey and

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launch the Fund guided by the understanding that building bridges to opportunity for others make us all stronger.
For BWCC, this means actively seeking opportunities to engage and work with minority and women professionals
– e.g. architects, contractors, engineers, specialty professional service providers – in executing the Fund’s
investment strategy. This intentional effort increases the presence of experienced and knowledgeable minority
and women practitioners that will contribute to making underserved and marginalized communities more
resilient and better able to address social and economic challenges, as well as capitalize on promising
opportunities.

The Fund also addresses a persistent limited access to capital for investment opportunities that are challenged
in securing traditional financing. In many cases, these investment opportunities require specialized knowledge
and expertise (e.g. NMTCs) that many traditional financial entities simply don’t possess. Fund investors can feel
confident in the ability of BWCC management to execute the Fund’s investments strategy. Our nearly 50 years of
combined knowledge and experience in entrepreneurship, economic development finance, banking, business
strategy, asset management, and public-private partnerships serve as a unique value-add asset to the Fund’s
portfolio of investments.

Invest with Confidence

In keeping with BWCC’s “keep it simple” approach to investing, management pursues investment opportunities in
a straightforward manner.

1. Identify prospective investment opportunities through our various networks (e.g. NMTC network, existing
and prior client referrals, and business development networks).

2. Conduct preliminary due diligence to determine which prospective investment opportunities BWCC will
focus time and energy pursuing further. Subsequently, deeper due diligence is conducted for attractive and
promising opportunities.

3. For investment opportunities that garner strong interest, BWCC works with stakeholders to right-size
financing requirements and determine how the Fund will participate via an investment. The Fund has
multiple vehicles for which to invest in deals (e.g. debt and equity structures).

4. Proven Back Office Execution, Reporting and Compliance: Upon the Fund making an investment, BWCC will
engage in post-financing closing oversight to ensure execution of investment strategy in order to meet Fund
investment performance targets.

BWCC looks to enter an opportunistic investment space with the Fund. Demand for leverage capital consistently
exceeds available supply for NMTC investments each year. As such, a distinct component of the Fund’s investment
strategy is leveraging the federal NMTC Program, which incentivizes community development and economic
growth through the use of tax credits that attract private capital to distressed and underserved communities.
BWCC’s deliberate focus on this space for investments represents our commitment to playing to our strengths
and core competencies. As such, management is confident in its ability to perform successfully as investors in
this space.

With the recent five-year reauthorization of the federal NMTC Program (which entails $17.5 billion of NMTC
transaction authority, with $10.5 billion expected within the next two years), providing leverage capital continues

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to present a robust business opportunity within the growing NMTC industry. Leverage represents the largest
single source of capital in NMTC transactions. In today’s market, NMTC transactions are principally composed of
leverage, ranging from 60 to 75 percent of total investment capital, and equity provided by tax credit investors
and deal sponsors making up the remaining 25 to 40 percent of the financing capital stack.

Fund Structure

The Fund structure is a hybrid private equity model, with a traditional “raised-capital” component (actual capital
raised) and an equity-upon-request component (committed equity not yet raised). The traditional component
provides BWCC with available capital to readily deploy into attractive investments that align with the Fund’s
investment strategy. The equity-upon-request component allows investors to commit capital to the Fund but
deploy the funds upon approval of a specific investment opportunity by BWCC and the Investor. The target capital
allocation for the hybrid model will be $10 million of equity-upon-request capital and $15 million of traditional
capital.

The hybrid private equity model structure aims to meet the needs of investors and allow the Fund to execute its
investment strategy – a win-win proposition.

• “Equity-upon-request” - This feature allows the Investor to manage their capital up until time to fund an
actual investment via the Fund. This eliminates the risks associated with an investor’s committed, but not
yet deployed, capital to the Fund – e.g. management fees paid on dormant capital and foregone
opportunity to generate a return on committed capital via investors’ own asset management activities.

• Traditional “raised” capital allows BWCC to be an opportunistic – with capital readily available to deploy
to attractive investments – as well as a patient investor. Some investment opportunities may require the
Fund to be able to move and engage in a timely manner, with time being of the essence. Accordingly, the
raised capital component positions the Fund for such prospective opportunities.

Types of Fund Investments

The Fund will make targeted investments that align with the Fund’s strategy and objectives by employing three
investment vehicles.

• Equity Investment: Fund makes a direct equity investment into a targeted investment in exchange for an
ownership interest in the underlying enterprise or project. An ownership interest under this investment
structure allows the Fund to participate in periodic distribution of net operating income (ownership equity)
and any agreed upon fees and interest payments (e.g. quarterly, semi-annual, annually) from income
generated from the operations of the underlying enterprise.

• Term Loan: Fund provides capital into a targeted investment in the form of a structured loan. The Fund
will receive periodic interest payments (e.g. quarterly, semi-annually, annually) for a specified time period.
At the end of the specified loan term, the outstanding loan amount will be returned in full to Fund along
with any remaining interest payments owed.
o Fund would also be able to generate fees (e.g. finance origination fee) for term loan investments,
which would further boost the overall investment performance for the Fund.

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• Bridge (Gap) Funding: Fund provides short-term capital funding to fill a gap in the financing transaction
capital stack – to ensure that 100 percent (full) financing is in place for a target investment to move
forward. Bridge funding typically serves as short-term capital that is repaid in full upon reaching specified
milestones (e.g. close of financing for investment, construction completion, business expansion ramp-up).
o The Fund would receive interest payment(s) on the bridge funding investment and return of the
outstanding amount at a specified time period, along with any remaining interest payments owed.

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BWC Capital
Investment: CrossPlex Village (Phase I)
Location: Birmingham, AL

Investment Participation: BWC Capital holds a 20 percent

ownership interest in the CrossPlex Village (Phase I) project.1

Investment Amount1: $105,000 equity investment

Investment Performance: BWC Capital’s ownership interest in CrossPlex Village is expected to generate

attractive financial performance over the initial seven years of the investment:

• Projected IRR exceeds 24 percent
• Return on equity (ROE) on initial equity investment more than 230 percent
• Average annual ROE of more than 20 percent (prior to executing exit strategy).
• Cash-on-cash return of more than 3x initial equity investment

Project Summary

CrossPlex Village is a $21 million mixed-use economic development initiative that includes the use of subsidy
financing via the federal New Market Tax Credit (NMTC) Program. The project includes a 101-room Comfort Inn &
Suites hotel, a Starbucks Commercial Center that includes a restaurant, and a collection of four eateries
(“Restaurant Row”). The CrossPlex Village project is currently under development on approximately nine acres of
land in a highly distressed and underserved area in the western area of Birmingham, AL. The project sits adjacent
to the CrossPlex – a world-class sport competition facility that houses one of the fastest indoor hydraulic tracks in
the world (a 4,000-capacity spectator venue), an Olympic size swimming pool, a nine-volleyball court venue, a
5,000-seat basketball arena, an indoor natatorium seating of 1,600, and a platform to develop many other sports.

CrossPlex Village builds onto the more than $50 million that the City of Birmingham has invested to create a sports
destination venue that can serve as the economic engine and catalyst to redevelop the City’s western area – which
is home to predominantly African American residents. This project is anticipated to drive substantive economic
impacts for its low-income community (LIC) and people (LIP) in the area. CrossPlex Village will also provide visitors
to the CrossPlex sports venue with hospitality, eateries, and retail options, and will no longer require travel away
from the venue to downtown Birmingham and other areas of the City in order to enjoy such amenities.

This project is the first of a multi-phase economic development initiative that entails (re)development of 38 acres
of land surrounding the CrossPlex sports venue. A Walgreens is slated to be part of CrossPlex Village and future
development will add clothing stores and other retail amenities. A combination movie theater and bowling alley
have expressed interest in joining the development and a new home for the A.G. Gaston Boys & Girls Club is
planned to be located behind the CrossPlex sports venue. The City anticipates that much, if not all, of CrossPlex

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Village will be in place in time for the 2021 World Games. Birmingham is hosting the international event, with
CrossPlex figuring as a main venue.

EDIF Investment Opportunities (hypotheticals)

The Economic Development Infrastructure Fund (Fund) positions BWC Capital to increase its participation in
attractive investment opportunities such as CrossPlex Village. Potential Investment opportunities in CrossPlex
Village via the Fund could have included options such as:

• An increased ownership interest in CrossPlex Village through an increased equity investment, which would
allow the Fund to generate greater financial returns annually and over the life of the investment.
o Major income sources generated by the underlying CrossPlex Village project are commercial lease
agreements with tenants that are part of the mixed-use project (e.g. Starbucks, Cici’s Pizza, Golden
Rule Bar-B-Q, Ninja Japanese Sushi & Steakhouse, Habanero’s Mexican Grill, and Firehouse Subs)
and net income generated from the Comfort Inn & Suites hotel.

• Provide short-term bridge equity to ensure timely closing of financing CrossPlex Village. Getting such
projects to operating status in a timely manner allows the underlying enterprise to begin generating
income as soon as possible. The Fund would position BWC Capital to step in as a provider of short-term
private capital (e.g. for the project developer) and ensure full financing is in place to close financing and
move project forward.
o BWC Capital would serve as a short-term capital provider, in which the capital investment could be
repaid, along with fee/interest payments upon official closing of financing, or shortly thereafter.
o BWC Capital could also provide such capital as convertible debt, which would give BWC Capital the
option to convert its initial investment (in the form of a term loan) into an equity investment and
obtain an ownership interest in the project.

• For attractive projects like CrossPlex Village, the Fund positions BWC Capital to acquire an existing
ownership interest in the project – in the instance that an initial investment is not possible. A direct
investment would allow the Fund to secure an ownership interest in a project that generates attractive
financial returns.

Important Information and Disclosure
This material is for informational and discussion purposes only, is subject to amendment and updating, and does not
constitute an offer or solicitation to buy or sell any securities. Past performance is not an indicator or guarantee of
future results. This presentation is not intended to be, nor shall it be construed as, investment advice or a
recommendation of any kind. This presentation is not complete and is subject to the more complete disclosures, risk
factors and other terms and conditions that will contained in the Fund’s Confidential Private Offering Memorandum
and other related offering documents. Under no circumstances may a copy of this presentation be shown, copied,
transmitted or otherwise given to any third person other than your financial, tax and investment advisors.

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BWC Capital
Investment Opportunity: The Shadow League (TSL)
Location: New Jersey (anticipated relocation to Bronx, NY)

Investment Amount: The Shadow League ® (TSL), a minority-led emerging sports media enterprise, seeks a total

of one million, seven hundred and fifty thousand dollars ($1,750,000) in investment capital to support the expansion
and growth of its business operations.1

Project Summary: With its launch in 2012 by media veteran, Keith Clinkscales, The Shadow League® (TSL) became

the first digital publisher entity devoted to sports and pop culture journalism that is infused by a distinct cultural
perspective. The mission of this minority-owned and led business is to inform and educate sports fans worldwide through
a cultural, refreshing, professional, journalistic approach to sports coverage. Guided by a vision to continually drive
cultural impacts and increased awareness of race, sports and life in provocative, sensitive and truthful ways, TSL’s web-
based digital platform generates revenue from three main revenue streams:

• Event Sponsorships: Consist of sponsorship deals that are secured for Shadow League created, owned, and
operated events. No advertising is secured via the TSL website for these events.

• Premium Services: Consist of ad campaigns secured directly from media agencies and/or clients, which run
on the TSL website.

• Programmatic Services: TSL is currently developing Shadow League Films, with a successful project already
in production, for companies such as Bleacher Report and BET. This business area has great potential for
future revenue growth and TSL anticipates prepping its website to ensure the necessary technology
platform is in place to support business growth in this area.

Total gross revenue for TSL is projected to reach $1.6 million, with a profit margin of nearly 20 percent, for 2017. TSL
anticipates that successful execution of its business growth strategy will increase gross revenue to more than $5
million, and an operating profit margin to nearly 30 percent, within five years. The requested investment capital is
pivotal to positioning TSL to grow its business operations and footprint in this unique niche area of the broader
sports media landscape.

TSL Milestones and Accomplishments, to Date
• Experienced growth across all key user and engagement metrics during 2016.
o Eighty five percent (85%) increase in website views, with a 52 percent increase in unique webpage
visits.
o In December 2016, TSL experienced more than 2 million monthly unique visitors, its highest
monthly performance to date.
o Eighteen percent (18%) increase in Facebook users, 13 percent increase in Twitter users, and 12
percent increase in Instagram users.
• Developed three original programming series
o Launched three podcast programs
o Created four annual events and original programing event series
o Secured partnerships with more than 20 brand partners

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Use of Investment Funds: The requested investment capital will be used to expand the size of TSL’s facility by

relocating its corporate office from New Jersey (NJ) to a highly distressed census tract in the Bronx, NY. Moving to
the Bronx facility will position TSL to accommodate additional staff, acquire opportunistic sports media targets, and
allow for strategic investments in the business that will drive growth along key success metrics: increased website
traffic, corporate partnerships, brand recognition, and online presence, among others. The requested funding will
also help ensure that TSL is adequately capitalized to optimize its digital valuation in sports, which does not include
fantasy or betting, and position the enterprise to generate increased annual gross revenue and profitability from
operations.

EDIF Investment Opportunities (hypotheticals)

The Economic Development Infrastructure Fund (Fund) positions BWC Capital to support the growth of an emerging
minority-owned and led business such as TSL. Potential investment opportunities in TSL via the Fund could include
options such as:

• An ownership interest in TSL through a direct equity investment, which would allow the Fund to participate
in annual net operating income generated from operations.
o TSL business growth strategy is expected to boost revenue and profitability performance for its three
major revenue sources: Event Sponsorships, Premium Services, and Programmatic Services.

• Provide an equity investment that allows TSL to execute its exit strategy in exchange for an ownership
interest in the business. Exit strategies undertaken by TSL might entail:
o Retiring existing short- or long-term debt, in which an investment by the Fund would replace debt
with equity for TSL. This would reduce annual debt service payments for TSL, increase bottom-line
profitability performance, which the Fund would participate through its ownership interest.
o Refinance existing short- or long-term debt, in which an equity investment by the Fund would provide
more attractive and favorable terms and improve the financial performance for TSL.

• Fund makes investment into TSL in the form of a structured loan and receive periodic interest payments
over specified period of time. At the end of the specified loan term, the outstanding loan amount will be
returned in full to the Fund along with any remaining interest payments owed.

Important Information and Disclosure
This material is for informational and discussion purposes only, is subject to amendment and updating, and does not
constitute an offer or solicitation to buy or sell any securities. Past performance is not an indicator or guarantee of
future results. This presentation is not intended to be, nor shall it be construed as, investment advice or a
recommendation of any kind. This presentation is not complete and is subject to the more complete disclosures, risk
factors and other terms and conditions that will contained in the Fund’s Confidential Private Offering Memorandum
and other related offering documents. Under no circumstances may a copy of this presentation be shown, copied,
transmitted or otherwise given to any third person other than your financial, tax and investment advisors.

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