Jason Galanis

Jason Woodruff Galanis, (b. 1970) at New York Hospital on the Upper East Side of Manhattan, and raised in Greenwich, Connecticut, is an investor in financial technology companies and trademark inventions since 1988 and is currently a principal of Holmby Companies. He is also the son of fugitive white-collar criminal John Peter Galanis. He coordinated the leveraged buy-out of Internet Billing Company (iBill), a unit of credit-card processor Intercept Inc. iBill, one of the largest credit card transaction aggregators serving the Internet pornography industry, had been acquired by Intercept in 2002 for $104 million in cash. [ [http://www.forbes.com/technology/2004/06/09/cz_sl_0609intercept.html Forbes, "The Risky Business Of Porn ", Seth Lubove, 06.09.04] ] Galanis organized the purchase in 2004 for only $37M. [ [http://www.forbes.com/technology/ebusiness/2004/03/18/cz_sl_0318credit.html Forbes, "Phone Sex", By Seth Lubove, 03.18.04] ]

History

Galanis is an investor who concentrates on intellectual properties. Many of his investments are primarily focused on start-up companies and high-risk turnaround investments with financing or capital structure challenges. He attended the Brunswick School in Greenwich and majored in history at UC Santa Barbara. [ [http://www.linkedin.com/pub/0/68a/74 Linked in Website] ] He completed the Advanced Management Programme at Templeton College, Oxford University. He is married and lives in London, UK and Bel Air, California.

Financial and Investment Career

Triage Information Systems

Galanis began his career while still in college by acquiring delinquent loans from banks. He developed a distinctive credit-scoring algorithm used to apply a credit ranking and “collectibility” index to non-performing debt. To sell the technology, Galanis co-founded Triage Information Systems, a purchaser of consumer debt. It closed transactions worth over $2 billion in loans. One third of Triage was owned by Electronic Data Systems, and was financed by a $200 million line of credit provided by Cargill Financial Services, a unit of the grain giant of the same name.

Service One International

Galanis led the leveraged buy-out of Service One International, in Sioux Falls, [ [http://sec.edgar-online.com/2000/07/28/17/0000950116-00-001736/Section4.asp Edgar Online filings for “EGX FUNDS TRANSFER INC” , July 28, 2000] ] South Dakota established in 1982, to issue VISA credit cards to consumers unable to obtain credit elsewhere. In 1996, he led the refinancing and discounted payoff of the $200 million Cargill loan with Morgans Waterfall Vintiadis, a $2 billion hedge fund that Cargill introduced.

The Credit Store

Triage and Service One, along with its associated registered trademarks, "The Credit Store", and the patent-pending financial algorithm Galanis invented, were collectively sold in 1996 [ [http://www.highbeam.com/doc/1G1-18919814.html Credit Store Inc. makes announcement, December 6, 1996] ] to a New York based investment group.

Vianden Capital Management, LLC and Thesseus International Asset Fund

In 1997 Galanis was a principal of Vianden Capital Management, L.L.C. [ [http://www.secinfo.com/duWsb.661.htm Edgar Online, SEC Filings for Egx Funds, 1999] ] , the investment advisor to Thesseus International Asset Fund, a closed-end, split income venture capital fund that he founded to invest in early-stage financial services companies in North America and the UK, which he founded in December 1997. [ [http://stocks.us.reuters.com/stocks/officersDirectorsDetails.asp?symbol=EGXF.PK&WTmodLOC=C4-Officers-2&officerID=126318 Reuters, Officers & Directors Detail, for EGX Funds Transfer Inc EGXF.PK (OTC)] ] He was a managing director of KnightVianden, Oxford, UK [ [http://www.secinfo.com/$/SEC/Filings.asp?As=S&Name=galanisjasonw&Find=Jason+W%2E+Galanis SEC Info, “Jason W. Galanis” Filings as – Signatory] ] - a financial services company - which he co-founded with Dr. Knight and Kevin Washington in October 1998.

Incubator Capital, Emergent Financial, and XTRANIn 1999, Washington and Galanis found funding for a public entity, Shanecy, and renamed it Incubator Capital. Incubator entered a transaction to acquire Themeware, [ [http://www.secinfo.com/dsvrb.51jp.8.htm SEC Filing, Egx Funds Transfer Inc • 10KSB • For 3/31/00 • EX-10.9] ] [ [http://www.prnewswire.co.uk/cgi/news/release?id=40435 PRNewswire, Shanecy Executes Letter Of Intent To Acquire Internet Marketer, Themeware Corporation; Company Takes Additional Steps In Addressing Digital Divide, Tuesday 15 February 2000] ] an Internet business that used older media technology to sell websites and provide lease lines of credit to small to medium sized businesses (SMBs). ThemeWare was chaired by Gil Amelio. He and the board implemented Galanis’ plan to cross-sell VISA credit cards through ThemeWare’s distribution channels, [ [http://members.forbes.com/forbes/2000/0918/6608186a_4.html Forbes, The Long Reach of John Peter Galanis, September 18, 2000] ] including direct response television of The Internet Tool Box with spokesperson Richard Karn from the ABC sitcom, “Home Improvement”.

After the market fell in 2000, equity and debt financing for dotcom companies was unavailable, Galanis stepped down as president [ [http://www.forbes.com/people/2000/09/20/0920galanis.html Forbes, The Son Also Falls: Jason Galanis Is Out, By Bernard Condon, 09.20.00] ] and Incubator investments were terminated with little fanfare.

Galanis restructured Incubator as Emergent Financial and then acquired a start-up financial technology business called XTRAN, [ [http://www.thefreelibrary.com/Emergent+Completes+KeyCom+Acquisition-a078675799 Emergent Completes KeyCom Acquisition, BUSINESS WIRE, Sept. 27, 2001] ] which was a money payment and transmittal company similar to Western Union. XTRAN developed proprietary technology that utilized accessible banking infrastructure to electronically transmit money throughout the world, and with a focus on Mexico. It used credit card point-of-sale (POS) terminals found in retail stores. Instead the standard paperwork of this type of business, XTRAN was a fully automated technology.

After September 11, 2001, the U.S. Congress passed the U.S. Patriot Act, which, among other things, significantly altered the regulatory requirements for all financial transactions. This rendered XTRAN technology inadaptable to new stringent regulations, and the company disbanded. [ [http://www.secinfo.com/dV3p8.32b6.htm SEC Document, Settlements, Conversion of Series E Preferred Stock to Common Stock, XTRAN Collateral and Consulting Agreement] ]

General Media, Penthouse International, and Vector Partners

In 2002 Galanis acquired select Internet licensing rights and trademarks, including the original rights filed in the U.K. where founder Robert Guccione’s first began the company named General Media, a subsidiary of Penthouse International Inc. (publisher of Penthouse Magazine). Galanis and Guccione reached agreement for the acquisition of the rights to Penthouse’s brand for use on the Internet and Galanis agreed to finance Guccione’s magazine publishing business. [ [http://www.secinfo.com/dR7Km.329t.htm SEC Penthouse International Inc • 8-K • For 11/4/02] ]

In October 2002, a public company of which Galanis beneficially owned 73% acquired 99.5% of General Media, the parent company of Penthouse. [ [http://contracts.onecle.com/penthouse/galanis.indemn.2002.10.23.shtml Sample Business Contracts INDEMNITY AGREEMENT, Pulp Exchange, Inc. on October 23, 2002] ] [ [http://contracts.onecle.com/penthouse/guccione.indemn.2002.11.09.shtml INDEMNITY AGREEMENT, November 9, 2002, between American Pulp Exchange, Inc. and Robert C. Guccione] ] Galanis was the first outside equity shareholder of Penthouse since its founding, and he continued to invest in Penthouse through 2003, when Guccione ordered the company placed into voluntary bankruptcy protection. [ [http://www.buzzle.com/editorials/8-13-2003-44179.asp Guardian Newspapers, Outmoded Penthouse Lands in the Poorhouse, 8/13/2003] ] Galanis then lead the investment group that invested $68 million in capital with the bankruptcy court to restructure General Media through chapter 11. Galanis and his financial partner, Luis Enrique Fernando Molina (of the Molina family that owned PepsiCo on Mexico) from Mexico City, led the refinancing group, which was participated in by Post Advisory Group, a $9 billion division of Principal Financial Group, the life insurance company. [ [http://sec.edgar-online.com/2004/04/21/0000930413-04-001989/Section2.asp SEC BANKRUPTCY PROCEEDINGS, April 21, 2004] ]

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20110 / May 10, 2007Accounting and Auditing Enforcement Release No. 2608 / May 10, 2007SEC v. Penthouse International, Inc., Charles Samel and Jason Galanis, 05 CV 0780 (RWS) (S.D.N.Y.)The Securities and Exchange Commission today announced that it has settled its enforcement action against Penthouse International, Inc., Charles Samel, a former Director and Executive Vice-President of Penthouse, and Jason Galanis, a former shareholder. On April 27, 2007, the Honorable Robert W. Sweet of the United States District Court for the Southern District of New York entered final judgments that permanently enjoined Samel and Galanis from violating Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 thereunder, and from aiding and abetting violations of Section 15(d) of the Exchange Act, and Rules 12b-20, 15d-11, and 15d-13 thereunder, and in the case of Samel, Rule 15d-14 as well. Penthouse was also permanently enjoined from violations of these provisions. In addition, Samel and Galanis were each ordered to pay civil penalties of $60,000 and are barred for a period of five years from serving as officers or directors of public companies. Penthouse, Samel and Galanis, without admitting or denying the allegations in the complaint, consented to the entry of these final judgments.

The Securities and Exchange Commission filed its action against Penthouse, Samel and Galanis on January 24, 2005. The Commission's complaint alleged that Penthouse, Samel and Galanis engaged in accounting fraud and financial reporting violations at Penthouse in connection with the company's Form 10-Q for the quarter ended March 31, 2003. According to the complaint, Penthouse improperly included as revenue on the financial statements for that quarter $1 million received as an up-front payment in connection with a five-year website management agreement. The inclusion of the $1 million payment under the agreement increased Penthouse's reported revenue by approximately 9%, from $11,072,000 to $12,072,000 and changed a quarterly net loss of $167,000 to a purported net profit of $828,000. The Complaint alleged that Penthouse's Form 10-Q was materially misleading in several other respects. For example, the Commission alleged that it bore an unauthorized electronic signature of Robert C. Guccione, Penthouse's principal executive officer and principal financial officer, and thus represented that Guccione had reviewed and signed it, and the accompanying Sarbanes-Oxley certification. According to the complaint, this representation was false, as Guccione had not seen or approved the filing of the Form 10-Q or the Sarbanes-Oxley certification. Further, according to the complaint, Penthouse's auditors and outside counsel also had not reviewed the filing, a fact that also was not disclosed in the filing.

The Commission's complaint alleged that Samel and Galanis prepared and filed the false Form 10-Q, and they did so knowing or recklessly disregarding that Guccione had not seen or approved it, that Penthouse's auditor had not performed its required review of the Form 10-Q, and that it would be improper to include the $1 million payment as revenue for the quarter ended March 31, 2003.

Guccione Mansion

In January 2004, Galanis was the principal equity financier of the acquisition of the Manhattan mansion at 14-16 67th Street, that Bob Guccione bought and restored in 1975. The mansion is built of two smaller buildings, first constructed in 1879 and 1905, and merged into a convert|48|ft|m|sing=on wide mansion in 1920 for Jeremiah Milbank. [ [http://www.therealdeal.net/issues/MAY_2006/1146522520.php The Real Deal, "Centerfold mogul's manse becomes centerpiece", By Rebecca Shalomoff, May 2006] ]

For eight years, Guccione had unsuccessfully sought financing for his home. The mortgage holders then foreclosed on it. Galanis, along with his company, [ [http://www.avnonline.com/index.php?Primary_Navigation=Editorial&Action=View_Article&Content_ID=238257 AVN, "I Bill, You Bill, We All Scream for iBill: Is the check finally in the mail"?, By Dash Hamilton, September 1, 2005] ] Vector Partners, successfully created, negotiated and closed a financing structure, and the property was acquired for $26.5 million from the lenders. Vector invested the equity down-payment on the house purchase. [ [http://freerealtime.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?SessionID=3LBdjTdF57Ft3Bo&ID=2504310 United States Securities And Exchange Commission Washington, D.C. 20549, Form 10-Q/A, For The Quarterly Period Ended March 31, 2003 For Penthouse International, Inc.] ] Molina had become the control shareholder of Penthouse International in November 2003, and he granted Guccione a lifetime lease at one dollar per year. [ [http://realestalker.blogspot.com/2007/02/house-that-porn-bought-udate.html "The House That Porn Bought": UDATE, Real Talker, Friday, February 16, 2007] ]

Galanis had been made the co-trustee to the Molina/Vector investment trust, which not only held multiple Molina assets, but was also a major shareholder of Penthouse. [ [http://xbiz.com/news_piece.php?cat=2&id=7114 SEC Charges Penthouse, Others With Fraud, By Rhett Pardon, January 24, 2005] ] Galanis was made responsible for North American investments for part of the Molina/Vector portfolio. [ [http://www.ynot.com/modules.php?op=modload&name=News&file=news_article&sid=9729 "Former Penthouse Boss Guccione Responds to Lawsuit", by Q. Boyer, September 05, 2005] ]

Penthouse Media Group, iBill, and Latin PenthouseIn 2004, Galanis organized the leveraged buy-out of Internet Billing Company (iBill), [ [http://markets.chron.com/chron?ID=1654119&Page=NewsRead Houston Chronicle, Level 3 Securities Announces PHSL Has a Busy 4th Quarter That Shows Promise for 2005] ] a former division of PHSL Worldwide, Inc. iBill had been acquired in 2002 for $112 million in cash and was the largest Internet ecommerce company in the US. [ [http://www.internetretailer.com/internet/marketing-conference/19017-intercept-buys-online-payments-processors-ibill-epx.html InterCept buys online payments processors iBill and EPX, March 20, 2002] ] It maintained the most extensive database in the nation, with over 29 million unique records, on consumer transactions for adult content. Advised by Galanis, Molina consented to the acquisition of iBill by Penthouse International in March 2004. The iBill database and the iBill proprietary financial technology were to be combined with the Penthouse intellectual property to create a fully integrated ‘new media’ company on the Internet. The plan was part of the efforts of General Media to emerge from bankruptcy protection.

In late 2004, Galanis elected to exit the US public markets. He arranged a $16.5 million bond and preferred stock placement, and simultaneously arranged the acquisition of 40% of Penthouse Media Group, along with the acquisition of 100% of iBill, by a publicly traded company. [ [http://southflorida.bizjournals.com/southflorida/stories/2004/08/09/story4.html South Florida Business Journal, IBill sold for $55 million, by John T. Fakler, - August 6, 2004] ] The parties consented to a plan of reorganization that ceded 60% control to the bondholders. Financier Marc Bell became the new owner and Galanis sold the U.K. trademarks to Bell as well.

Latin Penthouse

In 2005 after the bankruptcy plan was accepted by the court, Molina acquired the rights to the Penthouse trademarks for Latin America from Penthouse Media Group. Since then, Molina opened the club, Penthouse Tower on Paseo de la Reforma in the business district of Mexico City. [ [http://www.mexicocity.gob.mx/media/inf%20oficial/Informe06.pdf Dra. Julia Rita Campos De La Torre, Secretaria De Turismo Del Gobierno Del Distrito Federal, Mexico] ] Prior to initiation of major construction, Galanis acquired 50% interest in the project in exchange for $7 million of financing. In January 2007, the convert|100000|sqft|m2|sing=on facility opened to 1,800 guests with 70 media outlet in attendance. Molina and Galanis Say that they will commercially develop the registered Penthouse trademark across Latin America in various venues and to cultivate a Latin Penthouse without the $50 million post bankruptcy debt burden of the US parent company. [ [http://www.pmgi.com/newsmedia_pressreleases_2005_09_12.html PMG Press Release, Penthouse Media Group Inc. Raises $48m In New Funding] ]

Geomas

Galanis met Geomas managing director John Veenstra in late 2001. Veenstra was working at his technology company called Zland, which had previously in the prior year filed its IPO with the S.E.C., an IPO sponsored by Credit Suisse First Boston (pulled due to dot com bust). Zland sold software to small businesses (SMBs) and is an inventor of several technologies, While Galanis was winding down his own investment in an SMB technology company (see above - ThemeWare/Internet Tool Box). in 2001, Veenstra had organized a strategic deal with Sprint [ [http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-21-2001/0001497582&EDATE= Sprint and ZLand Agree to Develop Network Operations Center] ] in 2002, and a public company that Galanis was ceo of entered into a transaction with Zland and Sprint [ [http://sec.edgar-online.com/2002/07/16/0001019687-02-001348/Section2.asp Edgar Filing on Zland arrangement] ] , the telecommunications company. In January 2003, Galanis’ relationship with Veenstra expanded when Galanis invested in technology that Veenstra had developed for geographic local search. Veenstra had developed and commercialized the technology in August 1995 [US Patent and Trademark Office. First use date for Registration Number: 2078627, registration number at the USPTO for the Zland trademarks filed in august 2005 as "internet organizer for geographic and topical information"] . The Zland.com website circa 1997 [ [http://web.archive.org/web/19970630121058/http://www.zland.com/ Zland Website] ] shows the continuation of the commercialization.

Companies advised by Galanis invested in Geomas [ [http://www.transworldnews.com/NewsStory.aspx?storyid=15059&ret=news.aspx&cat=Business TransWorld News, "Google Faces up to “Mistake,” Offers Apology to Sohu.com", 4/10/2007] ] , an intellectual property holding company whose principal assets consist of a US Patent with applications in the small to mid-size businesses industries as well as in interactive advertising, U.S. Patent Number 5,930,474 [ [http://www.google.com/patents?vid=USPAT5930474&id=mWcpAAAAEBAJ&dq=5930474 Patent info for "Internet organizer for accessing geographically and topically based information"] ] . Since 1995 when Galanis’ first patent was filed, all the way through his investments in the Penthouse trademarks, Galanis has made strategic investments in intellectual property. Geomas represents a watershed technology protected by a 20-year monopoly period [ [http://www.ecommercetimes.com/story/56786.html E-Commerce Times, "Google Apologizes to Sohu.com for `Mistake`", By Erika Morphy, 04/09/07] ] . Galanis and developer John Veenstra formed Geomas to commercialize the technology. Geomas uses the patented GeoTag^TM technology. GeoTag^TM geographically tags search and advertising [ [http://www.wired.com/politics/law/news/2007/06/location_patent Wired, "Patent Holder Sues Verizon, Claims to Own Location-Based Search", By Michael Myser 06.11.07] ] . In 2007, Galanis arranged the Round A financing of $20 million for Geomas supplied by a single institutional investor.

References

See also

External links

* [http://geomas.com/ Geomas Website]
* [http://jasongalanis.blogspot.com Galanis' Blog site]
* [http://jasongalanis.com Jason Galanis website]
* [http://galanisjason.com Jason W Galanis website]
* [http://jason-galanis.livejournal.com Jason Galanis MSN Blog]
* [http://360.yahoo.com/jasongalanis Jason Galanis Yahoo Blog]
* [http://www.ecommercetimes.com/story/56786.html Jason Galanis Ecommerce Times]
* [http://www.linkedin.com/in/jasongalanis Jason Galanis Linked-In]
* [http://www.zoominfo.com/people/Galanis_Jason_342341597.aspx Jason Galanis Zoom Info]
* [http://biz.googlepages.com/jasongalanis Jason Galanis Google Biz Pages]
* [http://www.naymz.com/search/jason/galanis/790978 Jason Galanis Naymz Profile]