Bolton Global Capital

Transcription

1 Bltn Glbal Capital CUSTOMER REQUEST FOR APPROVAL TO PURCHASE PENNY STOCKS INCOMPLETE INFORMATION WILL RESULT IN NON-APPROVAL Acct # -- Rep # Rep Name Client Name (please print) (please print) Legal Address Taxpayer ID Cntact Phne ( ) Age Marital Status Number f Dependants Emplyed By (Name f Emplyer) (Address) Occupatin Hw Lng? Financial Status: Annual Incme $ Liq. Assets $ Net Wrth $ Investment Inc.$ Pensin and Scial Security $ Other Incme $ Surce f Other Incme Other Investments: Cash r Equivalents $ Bnds $ Stcks $ Optins $ Other $ Financial Objectives (please chse all that apply): Cnservative Grwth Incme Grwth Aggressive Grwth Name f Stck Symbl Unslicited trade r Recmmended by advisr (please check ne) If recmmended by yur advisr, yu have received frm yur advisr the fllwing dcuments fr this cmpany: Current Financial statements: Regulatin filings Other Prir penny stck investments? Y r N (Circle) If Yes, mst recent Penny Stck Investment: Date # Of Shares Name f Stck Symbl Price $ Where did yu buy the stck? Was it slicited? Y r N D yu still wn the stck? Y r N If n, please indicate amunt f Gain/ Lss $ I HEREBY CERTIFY THAT THE ABOVE INFORMATION IS TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE. I HAVE RECEIVED A COPY OF IMPORTANT INFORMATION ON PENNY STOCKS REQUIRED FOR DISTRIBUTION BY THE SECURITIES AND EXCHANGE COMMISSION AND AM AWARE OF ITS CONTENTS. I ALSO CERTIFY THAT I HAVE REVIEWED THE DOCUMENTS OF THE ISSUING COMPANY WITH MY ADVISOR, AND UNDERSTAND THE SPECULATIVE NATURE OF THIS INVESTMENT. (Client Signature) (date) (Representative Signature) (Client Signature) (date)

2 Securities and Exchange Cmmissin Washingtn, DC Schedule 15G Under the Securities Exchange Act f 1934 Imprtant Infrmatin n Penny Stcks This statement is required by the U.S. Securities and Exchange Cmmissin (SEC) and cntains imprtant infrmatin n penny stcks. Yur brker-dealer is required t btain yur signature t shw that yu have received this statement befre yur first trade in a penny stck. Yu are urged t read this statement befre signing and befre making a purchase r sale f a penny stck. Penny stcks can be very risky. Penny stcks are lw-priced shares f small cmpanies nt traded n an exchange r quted n NASDAQ. Prices ften are nt available. Investrs in penny stcks ften are unable t sell stck back t the dealer that sld them the stck. Thus, yu may lse yur investment. Be cautius f newly issued penny stck. Yur salespersn is nt an impartial advisr but is paid t sell yu the stck. D nt rely nly n the salespersn, but seek utside advice befre yu buy any stck. If yu have prblems with a salespersn, cntact the firm's cmpliance fficer r the regulatrs listed belw. Infrmatin yu shuld get. Befre yu buy penny stck, federal law requires yur salespersn t tell yu the "ffer" and the "bid" n the stck, and the "cmpensatin" the salespersn and the firm receive fr the trade. The firm als must mail a cnfirmatin f these prices t yu after the trade. Yu will need this price infrmatin t determine what prfit, if any, yu will have when yu sell yur stck. The ffer price is the whlesale price at which the dealer is willing t sell stck t ther dealers. The bid price is the whlesale price at which the dealer is willing t buy the stck frm ther dealers. In its trade with yu, the dealer may add a retail charge t these whlesale prices as cmpensatin (called a "markup" r "markdwn"). The difference between the bid and the ffer price is the dealer's "spread." A spread that is large cmpared with the purchase price can make a resale f a stck very cstly. T be prfitable when yu sell, the bid price f yur stck must rise abve the amunt f this spread and the cmpensatin charged by bth yur selling and purchasing dealers. If the dealer has n bid price, yu may nt be able t sell the stck after yu buy it, and may lse yur whle investment. Brkers' duties and custmer's rights and remedies. If yu are a victim f fraud, yu may have rights and remedies under state and federal law. Yu can get the disciplinary histry f a salespersn r firm frm the NASD at , and additinal infrmatin frm yur state securities fficial, at the Nrth American Securities Administratrs Assciatin's central number: (202) Yu als may cntact the SEC with cmplaints at (202) CUSTOMER STATEMENT I HEREBY ACKNOWLEDGE RECEIPT OF THE DOCUMENTS ENTITLED IMPORTANT INFORMATION ON PENNY STOCKS RECOMMENDED FOR DISTRIBUTION TO CUSTOMER BY THE SECURITIES AND EXCHANGE COMMISSION AND AM AWARE OF ITS CONTENTS Custmer Name Custmer Signature Date

3 Further Infrmatin The securities being sld t yu have nt been apprved r disapprved by the Securities and Exchange Cmmissin. Mrever, the Securities and Exchange Cmmissin has nt passed upn the fairness r the merits f this transactin nr upn the accuracy r adequacy f the infrmatin cntained in any prspectus r any ther infrmatin prvided by an issuer r a brker r dealer. Generally, penny stck is a security that: Is priced under five dllars; Is nt traded n a natinal stck exchange r n NASDAQ (the NASD's autmated qutatin system fr actively traded stcks); May be listed in the "pink sheets" r the NASD OTC Bulletin Bard; Is issued by a cmpany that has less than $5 millin in net tangible assets and has been in business less than three years, by a cmpany that has under $2 millin in net tangible assets and has been in business fr at least three years, r by a cmpany that has revenues f $6 millin fr 3 years. Use Cautin When Investing in Penny Stcks 1. D nt make a hurried investment decisin. High-pressure sales techniques can be a warning sign f fraud. The salespersn is nt an impartial advisr, but is paid fr selling stck t yu. The salespersn als des nt have t watch yur investment fr yu. Thus, yu shuld think ver the ffer and seek utside advice. Check t see if the infrmatin given by the salespersn differs frm ther infrmatin yu may have. Als, it is illegal fr salespersns t prmise that a stck will increase in value r is risk-free, r t guarantee against lss. If yu think there is a prblem, ask t speak with a cmpliance fficial at the firm, and, if necessary, any f the regulatrs referred t in this statement. 2. Study the cmpany issuing the stck. Be wary f cmpanies that have n perating histry, few assets, r n defined business purpse. These may be sham r "shell" crpratins. Read the prspectus fr the cmpany carefully befre yu invest. Sme dealers fraudulently slicit investrs' mney t buy stck in sham cmpanies, artificially inflate the stck prices, then cash in their prfits befre public investrs can sell their stck. 3. Understand the risky nature f these stcks. Yu shuld be aware that yu may lse part r all f yur investment. Because f large dealer spreads, yu will nt be able t sell the stck immediately back t the dealer at the same price it sld the stck t yu. In sme cases, the stck may fall quickly in value. New cmpanies, whse stck is sld in an "initial public ffering," ften are riskier investments. Try t find ut if the shares the salespersn wants t sell yu are part f such an ffering. Yur salespersn must give yu a "prspectus" in an initial public ffering, but the financial cnditin shwn in the prspectus f new cmpanies can change very quickly. 4. Knw the brkerage firm and the salespeple with whm yu are dealing. Because f the nature f the market fr penny stck, yu may have t rely slely n the riginal brkerage firm that sld yu the stck fr prices and t buy the stck back frm yu. Ask the Natinal Assciatin f Securities Dealers, Inc. (NASD) r yur state securities regulatr, which is a member f the Nrth American Securities Administratrs Assciatin, Inc. (NASAA), abut the licensing and disciplinary recrd f the brkerage firm and the salespersn cntacting yu. The telephne numbers f the NASD and NASAA are listed n the first page f this dcument. 5. Be cautius if yur salespersn leaves the firm. If the salespersn wh sld yu the stck leaves his r her firm, the firm may reassign yur accunt t a new salespersn. If yu have prblems, ask t speak t the firm's branch ffice manager r a cmpliance fficer. Althugh the departing salespersn may ask yu t transfer yur stck t his r her new firm, yu d nt have t d s. Get infrmatin n the new firm. Be wary f requests t sell yur securities when the salespersn transfers t a new firm. Als, yu have the right t get yur stck certificate frm yur selling firm. Yu d nt have t leave the certificate with that firm r any ther firm.

4 Yur Rights Disclsures t yu. Under penalty f federal law, yur brkerage firm must tell yu the fllwing infrmatin at tw different times-befre yu agree t buy r sell a penny stck, and after the trade, by written cnfirmatin: The bid and ffer price qutes fr penny stck, and the number f shares t which the quted prices apply. The bid and ffer qutes are the whlesale prices at which dealers trade amng themselves. These prices give yu an idea f the market value f the stck. The dealer must tell yu these price qutes if they appear n an autmated qutatin system apprved by the SEC. If nt, the dealer must use its wn qutes r trade prices. Yu shuld calculate the spread, the difference between the bid and ffer qutes, t help decide if buying the stck is a gd investment. A lack f qutes may mean that the market amng dealers is nt active. It thus may be difficult t resell the stck. Yu als shuld be aware that the actual price charged t yu fr the stck may differ frm the price quted t yu fr 100 shares. Yu shuld therefre determine, befre yu agree t a purchase, what the actual sales price (befre the markup) will be fr the exact number f shares yu want t buy. The brkerage firm's cmpensatin fr the trade. A markup is the amunt a dealer adds t the whlesale ffer price f the stck and a markdwn is the amunt it subtracts frm the whlesale bid price f the stck as cmpensatin. A markup/markdwn usually serves the same rle as a brker's cmmissin n a trade. Mst f the firms in the penny stck market will be dealers, nt brkers. The cmpensatin received by the brkerage firm's salespersn fr the trade. The brkerage firm must disclse t yu, as a ttal sum, the cash cmpensatin f yur salespersn fr the trade that is knwn at the time f the trade. The firm must describe in the written cnfirmatin the nature f any ther cmpensatin f yur salespersn that is unknwn at the time f the trade. In additin t the items listed abve, yur brkerage firm must send t yu: Mnthly accunt statements. In general, yur brkerage firm must send yu a mnthly statement that gives an estimate f the value f each penny stck in yur accunt, if there is enugh infrmatin t make an estimate. If the firm has nt bught r sld any penny stcks fr yur accunt fr six mnths, it can prvide these statements every three mnths. A Written Statement f Yur Financial Situatin and Investment Gals. In general, unless yu have had an accunt with yur brkerage firm fr mre than ne year, r yu have previusly bught three different penny stcks frm that firm, yur brkerage firm must send yu a written statement fr yu t sign that accurately describes yur financial situatin, yur investment experience, and yur investment gals, and that cntains a statement f why yur firm decided that penny stcks are a suitable investment fr yu. The firm als must get yur written cnsent t buy the penny stck. Legal remedies. If penny stcks are sld t yu in vilatin f yur rights listed abve, r ther federal r state securities laws, yu may be able t cancel yur purchase and get yur mney back. If the stcks are sld in a fraudulent manner, yu may be able t sue the persns and firms that caused the fraud fr damages. If yu have signed an arbitratin agreement, hwever, yu may have t pursue yur claim thrugh arbitratin. Yu may wish t cntact an attrney. The SEC is nt authrized t represent individuals in private litigatin. Hwever, t prtect yurself and ther investrs, yu shuld reprt any vilatins f yur brkerage firm's duties listed abve and ther securities laws t the SEC, the NASD, r yur state securities administratr at the telephne numbers n the first page f this dcument. These bdies have the pwer t stp fraudulent and abusive activity f salespersns and firms engaged in the securities business. Or yu can write t the SEC at 450 Fifth St., NW., Washingtn, DC 20549; the NASD at 1735 K Street, NW., Washingtn, DC 20006; r NASAA at 555 New Jersey Avenue, NW., Suite 750, Washingtn, DC NASAA will give yu the telephne number f yur state's securities agency. If there is any disciplinary recrd f a persn r a firm, the NASD, NASAA, r yur state securities regulatr will send yu this infrmatin if yu ask fr it. Market Infrmatin The market fr penny stcks. Penny stcks usually are nt listed n an exchange r quted n the NASDAQ system. Instead, they are traded between dealers n the telephne in the "ver-thecunter" market. The NASD's OTC Bulletin Bard als will cntain infrmatin n sme penny stcks. At times, hwever, price infrmatin fr these stcks is nt publicly available. Market dminatin. In sme cases, nly ne r tw dealers, acting as "market makers," may be buying and selling a given stck. Yu shuld first ask if a firm is acting as a brker (yur agent) r as a dealer. A dealer buys stck itself t fill yur rder r already wns the stck. A market maker

5 is a dealer wh hlds itself ut as ready t buy and sell stck n a regular basis. If the firm is a market maker, ask hw many ther market makers are dealing in the stck t see if the firm (r grup f firms) dminates the market. When there are nly ne r tw market makers, there is a risk that the dealer r grup f dealers may cntrl the market in that stck and set prices that are nt based n cmpetitive frces. In recent years, sme market makers have created fraudulent markets in certain penny stcks, s that stck prices rse suddenly, but cllapsed just as quickly, at a lss t investrs. Mark-ups and mark-dwns. The actual price that the custmer pays usually includes the mark-up r mark-dwn. Markups and markdwns are direct prfits fr the firm and its salespeple, s yu shuld be aware f such amunts t assess the verall value f the trade. The "spread." The difference between the bid and ffer price is the spread. Like a mark-up r mark-dwn, the spread is anther surce f prfit fr the brkerage firm and cmpensates the firm fr the risk f wning the stck. A large spread can make a trade very expensive t an investr. Fr sme penny stcks, the spread between the bid and ffer may be a large part f the purchase price f the stck. Where the bid price is much lwer than the ffer price, the market value f the stck must rise substantially befre the stck can be sld at a prfit. Mrever, an investr may experience substantial lsses if the stck must be sld immediately. Example: If the bid is $0.04 per share and the ffer is $0.10 per share, the spread (difference) is $0.06, which appears t be a small amunt. But yu wuld lse $0.06 n every share that yu bught fr $0.10 if yu had t sell that stck immediately t the same firm. If yu had invested $5,000 at the $0.10 ffer price, the market maker's repurchase price, at $0.04 bid, wuld be nly $2,000; thus yu wuld lse $3,000, r mre than half f yur investment, if yu decided t sell the stck. In additin, yu wuld have t pay cmpensatin (a "mark-up," "mark-dwn," r cmmissin) t buy and sell the stck. \1/4\ In additin t the amunt f the spread, the price f yur stck must rise enugh t make up fr the cmpensatin that the dealer charged yu when it first sld yu the stck. Then, when yu want t resell the stck, a dealer again will charge cmpensatin, in the frm f a markdwn. The dealer subtracts the markdwn frm the price f the stck when it buys the stck frm yu. Thus, t make a prfit, the bid price f yur stck must rise abve the amunt f the riginal spread, the markup, and the markdwn. Primary fferings. Mst penny stcks are sld t the public n an nging basis. Hwever, dealers smetimes sell these stcks in initial public fferings. Yu shuld pay special attentin t stcks f cmpanies that have never been ffered t the public befre, because the market fr these stcks is untested. Because the ffering is n a first-time basis, there is generally n market infrmatin abut the stck t help determine its value. The federal securities laws generally require brker-dealers t give investrs a "prspectus," which cntains infrmatin abut the bjectives, management, and financial cnditin f the issuer. In the absence f market infrmatin, investrs shuld read the cmpany's prspectus with special care t find ut if the stcks are a gd investment. Hwever, the prspectus is nly a descriptin f the current cnditin f the cmpany. The utlk f the start-up cmpanies described in a prspectus ften is very uncertain. Fr mre infrmatin abut penny stcks, cntact the Office f Filings, Infrmatin, and Cnsumer Services f the U.S. Securities and Exchange Cmmissin, 450 Fifth Street, NW., Washingtn, DC 20549, (202)