Thinking of selling your business? Avoid these costly mistakes

By James S. Cassel

James Cassel headshotFor middle-market business owners thinking of selling their businesses, it can be easy to make a common — and costly — mistake: having the wrong valuation expectation. Influenced by hearsay and news reports of high valuations related to larger businesses and mega mergers and acquisitions, they develop overinflated expectations for the value of their own companies. As a result, they put themselves in a position of becoming disappointed, wasting time and resources, and missing opportunities.

Business decisions must be made using facts rather than emotions or
unfounded assumptions. Based on my experience working with middle-market business owners, here are some of the common factors that can negatively impact or shade their judgment. All of these are easily avoidable.

It happens all the time: Business owners hear that people they know or companies in their industries received high values for companies. Sometimes the reports are true; other times, they are fiction. In either case, business owners draw inaccurate comparisons and conclusions about what they can expect to get for their own companies. When anyone tells you they sold for a high value, do not assume this is any indication of what will happen when you sell your business.

First, you should confirm whether those sellers really received those values. Sometimes it is impossible to obtain this information. People often embellish.

If they really received those values, you must determine whether your business
is positioned to get a similar value, and you should identify the considerations and preparations necessary to secure the highest possible value.

Did those people you know sell early to consolidators who paid a premium, and now that those consolidators have completed those acquisitions, do the consolidators no longer need to acquire your company at a premium? Did you make a mistake by not selling first?

You must know how to accurately compare your business to those other businesses. Are your revenues the same? Do you have the same profitability and margins? Can your potential buyers find synergies by eliminating costs, consolidating parts of your business, or implementing new measures to achieve greater efficiencies? What have your key growth drivers been? Good advisors can help you navigate these questions.

Every company and industry is different, and while it is important to compare yourself to others, you must recognize the differences between your company and similar ones so you can properly assess your own situation. Additionally, timing can impact the valuation you can achieve.

For example, while Burger King and McDonald’s both franchise restaurants that sell hamburgers, they have different business models. McDonald’s owns or secures long-term leases for its franchise locations and Burger King does not. This affects restaurant performance levels, thereby affecting value.

Moreover, companies in different industries have different valuations. Tech companies can receive higher multiples than distribution companies because they have higher margins, profitability and, in many cases, greater growth.

Some business owners also get too emotional, their perceptions become clouded, and they fail to understand true valuation. Some think they should set the sales price of their companies based on the amount of money they need to maintain their current lifestyles. This is not a realistic approach.

Like it or not, here are the facts: A business is worth whatever a ready, willing and able buyer is willing to pay for it. Buyers want to pay what your business is worth today and not what it will be worth in the future. Buyers also generally do not want to pay for synergies: They want synergies to be among the advantages they gain in the acquisition.

Sellers also make inaccurate assumptions when they neglect to consider expense factors that may affect the companies’ profits after the sale.

Buyers will consider these factors when determining how much they are willing to pay, so you should consider this upfront and plan accordingly. For example, if you get business because your company is minority and/or woman-owned, what will happen if you sell and these advantages are lost?

For middle-market business owners thinking of selling their businesses, it is important to work with trusted professionals who can provide sound guidance as to value and process. Do not blame the messengers if they do not say what you want to hear. Everyone on the seller’s side wants to sell for the highest price, but to maximize values it is important to be realistic and use sound decision-making. Otherwise, you run the risk of missing valuable opportunities to sell your business at a realistic price to legitimate buyers.

James Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies.

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NephroGenex, Inc. Commences Voluntary Chapter 11 Proceeding; Seeks To Initiate Sale Process Under Section 363

RALEIGH, N.C.–(BUSINESS WIRE [1])–In connection with its decision to seek Chapter 11 protection, NephroGenex has retained the investment banking firm of Cassel Salpeter & Co., LLC, to assist with the anticipated sale of its assets through a sale process under Section 363 of the Bankruptcy Code. To that end, NephroGenex anticipates that it will seek approval by the Court of appropriate bidding and sale procedures in the early weeks of its Chapter 11 case.

“The Board and management team have conducted a rigorous assessment of all of our strategic alternatives and believe that this process represents the best possible solution for NephroGenex, taking into account our financial situation,” said Richard J. Markham, Chairman of t he Board of NephroGenex. “We are committed to an out come that maximizes value and believe that a bankruptcy sale process will enable us to meet that objective.”

NephroGenex has filed a series of customary motions with the Court seeking to ensure the continuation of normal operations during this process, including the timely payment of future employee wages and salaries, as well as maintaining employee benefits.

Additional information about this process, as well as court filings and other documents related to the Chapter 11 proceedings, are available through NephroGenex’s claims agent , Kurtzman Carson Consultants LLC, at [2].

Cole Schotz P.C. is serving as the Company’s legal advisor for the bankruptcy proceedings and Cassel Salpeter & Co., LLC is serving as its financial advisor for the bankruptcy proceedings.

Cautionary Note on Forward-Looking Statements

This press release contains certain statements that are, or may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “int ends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for our future business and financial performance. Forward-looking statement s are based on our current expect at ions and assumptions, which are subject t o inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from those in the forward-looking statements due to global political, economic, business, competitive, market, regulatory and other factors and risks, including the items identified in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission (“SEC”) on March 29, 2016, as well as in other filings that we may make with the SEC in the future. The forward-looking statements contained in this press release reflect our current views with respect to future events, and we do not undertake and specifically disclaim any obligation to update any forward-looking statements.

Avenger Flight Group received growth capital from Patriot Capital and Seacoast Capital

  • Background:   Headquartered in Ft. Lauderdale, FL, Avenger Flight Group, LLC provides commercial aviation simulation and training to domestic and international airlines using state of the art simulators located in Ft. Lauderdale, Las Vegas, Mexico City and Dallas.  Avenger also provides classroom training for trainers and pilots.
  • Cassel Salpeter:
    • Served as the exclusive financial advisor to the Company
    • Ran a competitive growth capital raise process, identifying and contacting over 50 strategic and financial parties
  • Challenges:
    • Complex existing capital structure
    • Capital intensive business
  • Outcome: In May 2016, Patriot Capital and Seacoast Capital invested in Avenger Flight Group.  Patriot Capital is a private investment firm based in Baltimore, MD.  Seacoast Capital is a private investment fund based in Boston, MA.

5 Ways to Drive Business Growth

By James S. Cassel

James Cassel headshot

A common mistake for middle-market business owners is getting too caught up running day-to-day business operations and not allocating enough time to consider strategies to reposition and reinvent their companies when needed.

In my experience working with middlemarket companies, I have learned five general areas where companies seeking continued growth should focus their efforts. Whether companies are seeking exponential or incremental growth, they should keep in mind the following five growth drivers.

Have the right team: Like it or not, your company is only as strong as your weakest link. Many times, the weaker links can be strengthened by reevaluating their positions to ensure that the right employees are in the right places. Otherwise, if you find there is no place where the weaker links can contribute at the level they should, you should consider replacing them.

Play to people’s strengths, and put them in positions that best allow them to thrive, applying their knowledge, skills and talents. Do not assume a good salesperson will make a good manager, as that salesperson might have a great sales personality but might not enjoy or succeed in a management role.

Recently, a friend confided that she lamented her promotion because she had to give up the position she loved. Although she now has more responsibilities and higher pay, she is not doing what she most enjoys and therefore is looking to leave the company.

Continuously evaluate your senior management team. Do you have the right senior management in the right roles? Have they helped get you to where you are? Can they take you to the next level? Different organizations need different management structures at different times — there are no cookie-cutter solutions, and the key is to find what works right for your organization.

Have the right branding and marketing: In today’s competitive market, it is important to have strong brand presence and keep your brand top of mind. Fish bite when they are hungry, so always keep your bait in the water.

Before launching any public relations or marketing campaigns, make sure you have strong brand assets (logo, website, tagline, etc.). For example, it does not make sense to drive people to a subpar website that does not put your business in the best possible light.

Also, make sure you have the right marketing team. Many business owners do not understand the difference between public relations, advertising, and branding, or the importance of having a strategic marketing plan that is designed to support their business plan. Some do not recognize that a good advertising agency that creates award-winning television commercials might not be a strong public relations agency that can secure top-tier media coverage, or that a creative web design firm that can launch attractive websites might not be good at developing search-engine optimization programs to ensure that those sites rank high on search-engine results pages.

Have the right suppliers: While it can be comfortable for business owners to continue to work with the same folks they have worked with for years, it is important to routinely evaluate these relationships to ensure that you have the right suppliers with the right capacity to grow with you. Are they supplying the right products or do you need to expand that? Do they give you the right quality, pricing and support?

Have the right research: Knowledge is power, and you should continually conduct product and market research to determine where your products and services are needed. Can you identify new markets? How are you perceived by your customers or clients and the public? Some business owners conduct this research internally while others outsource these functions to specialists. Whatever approach you choose, all of this insight can assist your strategic business planning.

Have the right geography: Are you a single or multi-location business? Do you have the right locations? Can you provide quality service to your clients from where you are currently based? When it comes to expansion, you can take advantage of innovative solutions like shared workspaces or virtual offices to give the perception of a broader presence.

While a multitude of other factors affect business growth, there is significant value in keeping these five factors in top of mind. A common mistake for middle-market business owners is getting too caught up running day-to-day business operations and not allocating enough time to consider strategies to reposition and reinvent their companies when needed.

To help you through this process, you may choose to apply internal resources or to rely on external partners with greater experience and specialization. Whatever the case, make sure these factors are evaluated routinely. By doing all these things right, you can help ensure maximum and sustained growth for your company.


James Cassel is co-founder and chairman of Cassel Salpeter & Co. LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies.

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James Cassel on why Miami is a great city to build a career

By Nina Lincoff

Where were you born? In Miami Beach at the old Mount Sinai. I may have been the youngest employee at Mount Sinai actually. At 14, I worked in the records department. It was an opportunity for a summer and I was paid, maybe $76 a week. I joke that I had more disposable income then than today because I had no expenses.

What did you use the money for? To buy my first car at 16, an Oldsmobile Cutlass from my mother for under $2,000. What’s worse was that when I was 17, I bought a brand new Buick Century. The problem was, when my future wife saw me in that car, she asked me if it was my father’s. I explained to her it wasn’t, it was the car I wanted, and she said it was better for a 40-year-old, not a 20-year-old.

How has Miami Beach changed? Miami Beach in the late 60s and early 70s …it was the James Bond era when “Goldfinger” was filmed at the Fontainebleau. It was a very small city and very much had a seasonality to it. In the summers a lot of stuff was closed and it was quiet. Today, of course, it’s very different. It’s a year-round community and the summers are as vibrant as the winters.

How did your family get to Miami? My family has been here since 1908. My grandmother had a house on 17th Street and Biscayne Boulevard and in the living room there were two grand pianos and an organ on a stage. She would have concerts there. My family has really grown up in Miami. I go to New York a lot, but Miami is different. It’s a great community and we have some very goods schools and there are great opportunities here. I never seriously thought about moving. As long as they can keep control of the rising sea, we’ll be in Miami.

Was the records department gig your first job? No, I worked as a delivery boy for the Miami Beach Sun, and then I worked for a gentleman by the name of Robert Hurwitz… on and off running political campaigns. We ran everything from a senate race to local races. Law school was a natural follow after that, because I had political aspirations at the time.

What happened to your political aspirations? Fortunately sanity prevailed. I was given advice that I didn’t want to seem like a politician who was in politics because they couldn’t do something else. The natural way to stay involved with politics was to get into law. I started as a real estate lawyer, working with my father. This was back in the 80s and I determined that I would be better in corporate law. In hindsight, it probably didn’t matter, but I started doing corporate law and I built my practice.

But you transitioned out of law? Yes, March 1, 1996 was my first day of not practicing law. I went into investment banking. In 1998, I started a boutique investment banking firm that I built with my partner Scott Salpeter and Gary Stein. We were ultimately acquired by Ladenburg Thalmann, in 2006. I ran private banking and had the opportunity to work with Phil Frost and he is more amazing than most people know. The depth and breadth of his knowledge is breathtaking.

And now you’re here, at Cassel Salpeter? At the end of ’09, which was a tough year, I left. From a technical standpoint, ’09 really sucked. In 2010 we founded Cassel Salpeter. We’ve been blessed, one of my children has joined up as has one of Scott’s kids. We’ve got a great team and we’re building a nice boutique South Florida firm.

What is the private equity environment like now? It changes in cycles. The industry is changing because of technology. If we had to do financial modeling 20 years ago it was very labor intensive, today tech gives you the ability to gather information much more easily. You still have to do a lot of work, don’t get me wrong, but technology has definitely made a different competitive environment.

What do you like to write about? To a certain extent I try to give back to the community. I try to write about things that are helpful to middle market businesses. Maybe they don’t get 50 points out of one article, but if they get one point, it has value. It’s also a way to stay in touch with people, because after all, we are a referral business.

James Cassel
Current position: Chairman and co-founder of Cassel Salpeter & Co.

Past position(s): Vice Chairman and head of investment banking at Ladenburg Thalmann, President, CEO and Chairman of Capitalink, Managing partner of the Miami office of Broad and Cassel; Chairman of the Retreat Psychiatric Hospital

Age: 60
Born: Miami Beach
Residence: Coconut Grove
Past boards: Equity One
Education: American University, University of Miami School of Law

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The 7 secrets of attracting and keeping top talent

By James S. Cassel

james-cassel-headshot-150x150While it is great that unemployment is trending toward full employment, it is not so great that finding new and qualified employees will become even more challenging. In markets like South Florida where access to talent is already limited, this will only make a difficult situation worse.

As the presidential candidates continue to talk about creating millions of new jobs, a glaring unanswered question remains: from where will the qualified talent come to fill these jobs?

The latest data from the U.S. Bureau of Labor Statistics show the U.S. unemployment rate at 4.9 percent in February, unchanged from the January rate and steadily remaining at its lowest level since April 2008. By definition, full employment is when unemployment is at 3 percent for persons 20 years of age and older and 4 percent for persons 16 years of age and older.

Creating new jobs with higher income opportunities will motivate people to move from one job to another, leaving vacant job positions in their wake and a void of skilled talent to fill them. As it is, under the current administration, companies are having a difficult time finding qualified talent for current vacancies. How do you find the right people to fill open positions?

While there is no purple pill, the key is to keep an open mind and embrace innovative tactics. Following is some general guidance based on our experience working with middle-market businesses through all types of economic and employment cycles:

1. Hire and train young people. One of the main concerns with hiring young folks is they will leave after you have trained them. To avoid this, provide the necessary growth opportunity along with compensation, benefits and work environment that will help motivate them to stay loyal and help you build your organization. Make them feel like part of the family. This may require moving beyond your comfort zone to accommodate employees’ preferences. Depending on your industry, this may include letting employees have flexible schedules, wear casual attire, or even throw darts or play video games in the office. Develop a pipeline and a bench.

2. Strategically recruit employees from competitors or other companies. Use various online sites (Indeed, CareerBuilder, LinkedIn, etc.) to post positions and search for candidates. Post them on your own website, too, as part of a robust “Careers” page that positions your company as an employer of choice interested in quality talent. Stay abreast of the latest and growing number of sites used for specific industries such as tech and healthcare. You might also consider traditional employment or search firms such as Steven Douglas Associates or CAREERXCHANGE, both of which are local and specialize in certain job types and levels.

3. Lure back people who have left the workforce. Consider people who are underemployed, working part-time, and who would prefer to work full-time. Also, consider folks older than 50 who have strong experience and may have many years of work left in them.

4. Offer flexible solutions to attract people and enable them to work for you. For example, there are companies dedicated to finding part-time or home- based employment for stay-at-home caregivers with excellent educational backgrounds and experience who could be strong assets to organizations.

5. Rely on referrals. Reach out to your base of employees and offer a bounty for those who refer new hires. Consult with key clients and industry partners, as well.

6. Use marketing and social media to promote your company as a good place to work. Pursue “best place to work” awards. This visibility is very positive and a great way to attract potential hires and retain great talent.

7. Consider nontraditional arrangements like job-splitting, which can be successful if done right. Here is how it works: Two people get together and split a job, and rather than getting 50 plus 50, you may get 60 plus 60 because both people end up having to overlap to communicate.

Whatever steps you decide to take, it will be important to implement a solid plan so that you can operate from an offensive rather than a defensive position. Consult experts who can help you identify the right strategies and tactics to meet your unique needs. It is sad to have your company’s growth limited by a lack of available talent. Developing the right plan now can help ensure that you take the right steps and position your business for maximum success.

James Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies. He may be reached via email at or via LinkedIn at His website

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Campaign 2016 and middle-market business: 4 of the hottest issues

February 22, 2016
By James S. Cassel

James Cassel headshotThe presidential candidates are discussing a myriad of key issues that could materially impact middle-market businesses, including everything from increasing operating costs to diminishing the local labor pool. As we make our voting decisions, it is critical for us to consider these and other issues and determine how our businesses may be affected.

Following is an overview of my take on four of the hottest issues likely to impact middle- market businesses: healthcare law, immigration, taxes and expenditures, the minimum wage and benefits.

Healthcare law. Some candidates want to eliminate Obamacare, some want to drastically change it, and some want to tweak it — any of which could change the benefits and/or costs for middle-market business owners and their employees. One thing many people agree on is that totally eliminating Obamacare is not an option. Some fundamental questions to consider: How would these scenarios affect your business and your employees? How will the proposed changes affect the costs for those covered, including higher premiums and/or higher taxes? Moreover, can you really take away what has already been given? Unfortunately, with all the rhetoric and one-liners without substantive, detailed proposals, not enough light has been shed on the actual impacts of the proposed changes.

Immigration. Candidates have varied views concerning the accessibility of much- needed H-1B visas as well the availability of other types of visas presently available permitting potential employees to immigrate legally. Depending on the outcome of the election and the policies adopted as a result, you might lose some of your existing employees or not be able to bring in new employees — all of which could have a negative effect on your business. H1-B visas and other methods of legal immigration are critical to filling the ongoing void in terms of access to qualified candidates with the right skill sets, which is causing many job openings to remain unfilled and is hurting middle-market businesses.

In addition, the United States is noted as a country that provides an education for the rest of the world. Some candidates might require foreigners who have received an education in the U.S. to leave the country immediately upon graduation. What a waste of our resources! It is important to consider how the loss of this potential employee talent could impact your middle-market business.

Our growing population is one of the main reasons the U.S. has enjoyed continued growth. This population growth has been driven to a large extent by immigration, which has supported the success of our middle-market businesses. We need a sensible immigration policy that allows appropriate people to immigrate to the United States so all businesses will have access to the quality talent they need.

Taxes and expenditures. Tax rates are likely to change. Whether we get a major overhaul to the tax system remains to be seen. Some advocate large cuts in government spending while others would expand government spending. Some candidates advocate an increase in taxes while others advocate a reduction. Others argue for a flat tax. Some may support the implementation of programs to encourage companies to bring more money back to the U.S. from out of the country to increase domestic investment or distributions to shareholders. This could help stimulate growth. Depending on what economic school you subscribe to, how you decide to vote and what ultimately happens with our tax rates and government expenditures, our economy could either contract or grow.

Minimum wage and benefits. Some candidates support an increase in the minimum wage and benefits, and an increase in entitlements. Few, however, have provided a realistic estimate of the costs or meaningful proposals on how to realistically pay for any increase. Other candidates advocate a reduction in entitlements, which by some estimates now total approximately 48.7 percent of the federal budget. They believe the growth is unsustainable. The costs on middle-market businesses will continue to increase and could have a negative effect on the economy.

Candidates have different views on wages. Some favor raising the minimum wage, which could lead to increased labor costs and force some business owners to cut jobs. It could end up causing middle-market business owners to deploy more technology to reduce overall costs of labor, and therefore eliminate jobs. This is a very difficult issue to tackle, as it involves a delicate balancing act between a sustainable wage and the labor costs of running a business.

Without a doubt, the outcome of the upcoming presidential election will have a significant impact on South Florida’s economy and middle-market businesses. It is important to invest the time to do your research and closely evaluate, among other things, how each of the candidates, if elected president, would affect your and the country’s bottom line.


James Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies. He may be reached via email at or via LinkedIn at His website is:

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Cassel Salpeter & Co. Represents Boxycharm in Recapitalization

MIAMI – February 10, 2016 Cassel Salpeter & Co., a middle-market investment banking firm providing capital raising services as well as merger, acquisition, divestiture and corporate finance services, served as exclusive financial advisor and facilitated a capital raise to recapitalize Boxycharm, a monthly beauty box subscription service providing high-end beauty and cosmetic products. The amount of the deal, which closed on February 3, is undisclosed.

The team at Cassel Salpeter, led by Director Joseph “Joey” Smith and Vice President Philip Cassel, identified and approached KarpReilly, the private equity firm that provided the capital. Cassel Salpeter assisted Boxycharm through the closing of the transaction. The capital will help grow the business, expand the management team, and fund innovative marketing initiatives to support its mission to continue to provide high-quality beauty products.

“We recognized that Boxycharm is a high-growth company with a strong management team, and we were eager to get involved with a company of this caliber and support its next phase of growth,” Philip Cassel said. “We enjoyed working with KarpReilly and look forward to working with the team on future deals.”

The deal was completed on a tight timeline, with the Cassel Salpeter team going to market in early November 2015 and closing the deal in early February.

“We greatly appreciate Cassel Salpeter’s ability to understand our needs and move quickly to address them by finding the type of strategic partner we wanted: one that would offer more than just capital,” said Joe Martin, Founder & CEO of Boxycharm. “From our first conversation, KarpReilly understood the passion and vision for the future of the company and we knew that was the start of what will surely be a long and successful relationship.”

Added KarpReilly Co-founder Allan Karp: “KarpReilly is excited to partner with Joe and the Boxycharm team. We are very impressed with what they have been able to accomplish by focusing on delivering a best-in-class experience to their subscribers and look forward to supporting them in their continued growth.”

Berger Singerman attorneys Daniel Lampert, David Black and Mitchell Goldberg represented Boxycharm. Ropes & Gray attorneys Daniel Evans, Darlyn Heckman and Michael Ross represented KarpReilly.

About Cassel Salpeter & Co.

Cassel Salpeter & Co., LLC is an independent investment banking firm that provides advice to middle market and emerging growth companies in the U.S. and worldwide. Together, the firm’s professionals have more than 100 years of experience providing private and public companies with a broad spectrum of investment banking and financial advisory services, including: mergers and acquisitions; equity and debt capital raises; fairness and solvency opinions; valuations; and restructurings, such as 363 sales and plans of reorganization. Co-founded by James Cassel and Scott Salpeter, the firm provides objective, unbiased, results-focused services that clients need to achieve their goals. Personally involved at every stage of all engagements, the firm’s senior partners have forged relationships and completed hundreds of transactions and assignments nationwide. The firm’s headquarters are in Miami. Member FINRA and SIPC. More information is available at

About Boxycharm

Boxy Charm Inc. is the premier monthly beauty box subscription service, delivering 4-5 full-size and luxury travel-size products of well-known, popular, chic, and up-and-coming cosmetic brands for only $21 per month. For more information, please visit

About KarpReilly

KarpReilly, LLC, is a private investment firm, founded by Allan Karp and Chris Reilly, whose primary mission is to partner with premier small- to mid-size growth companies and help them achieve their long-term vision. KarpReilly currently manages funds and affiliates with capital commitments in excess of $500 million. Over the past 15 years, the principals of KarpReilly have invested in, sat on the boards of and nurtured over 25 growth companies. For more information, please visit

Boxy Charms

AmeriJet, Jan 2016