EF Hutton America’s CEO made a personal investment in the company that he said will provide $1 million in financing as the financial firm works to promote its products.
CEO Chris Daniels said he purchased 2 million shares of the company for 50 cents per share. In return for the unregistered shares, the company said in a news release EF Hutton received a balloon note that matures in five years. In a balloon note, the principal is typically paid in one sum at the end of the term. He said he purchased the shares directly from the company in a private transaction.
“I am confident that EF Hutton’s previously announced mobile service will succeed in the market,” Daniels said. “I did not have to buy any shares. But I decided to buy the shares because I believe in the company’s direction and I wanted to express that — not just in words — but in a serious financial commitment.”
The company announced the mobile phone service in February, with plans it would be introduced in April. The service has been pushed back to add additional features, Daniels said, and will begin rolling out soon.
Daniels has said the mobile platform will work with customers’ existing phones or EF Hutton America will provide a new phone at an additional charge of between $5 to $25 per month, depending on the phone. He said it would allow customers to make trades with the company through the phone.
EF Hutton America is a financial services company that opened in downtown Springfield last fall in the former Credit Life Building. The 10-story building is one of the most prominent office buildings in Springfield and has since been renamed EF Hutton Tower. The Springfield News-Sun is a tenant in the building.
Earlier this year, the company borrowed $3 million using the downtown office tower as collateral, according to documents filed with the Clark County Recorder’s Office.
Alois Pirker, research director for the Aite Group, said it’s not uncommon for start-ups like EF Hutton to try several paths to gather financing.
“The big question is what will they do with that additional funding?” Pirker said.
Daniels said the company continues to hire and has several marketing initiatives underway, but didn’t go into further detail. He said the company would discuss the number of employees it has hired by the end of this month.
“Everything we do is based on growing the company and to add value to our customers, shareholders and other stakeholders,” Daniels said.
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