Raise up to $3 million to $35 million plus

Transcription

1 Raise up to $3 million to $35 million plus As a private corporation there are 2 ways to raise money for your company 1) OTCBB (stock) listing; 2) Private Corporate Bond. Both require the use of: A. Securities Lawyer; B. Auditor ( Accountant); C. Trustee/Transfer Agent (Commercial Bank); D. Securities Broker ( Market maker/ Underwriter); We are business agents and are able to assist you in both processes and in managing your relationships with the licensed industry professionals. Existing and New start up companies qualify. As there are significant conditions we offer a FREE consultation. ventures.com Phone: info@execu ventures.com

2 DEFINITION of 'Over The Counter Bulletin Board OTCBB' A regulated electronic trading service offered by the National Association of Securities Dealers (NASD) that shows real time quotes, last sale prices and volume information for over the counter (OTC) equity securities. Companies listed on this exchange are required to file current financial statements with the SEC or a banking or insurance regulator. There are no listing requirements, such as those found on the Nasdaq and New York Stock Exchange, for a company to start trading on the OTCBB. Stocks that trade on the OTCBB, will have the suffix ".OB". Getting a Ticker Symbol on the OTCBB, NASDAQ, AMEX or NYSE requires three things: 1) You have to have free trading stock. 2) You have to become an SEC reporting company, meaning a company that is required to file reports under the 1934 Filing Reports Act, as described under the Button SEC Reporting and Compliance. 3) You have to have the Financial Institution Regulatory Authority, called FINRA, issue you a Ticker Symbol. The SEC does not issue ticker symbols. The first step in the process is to prepare the SEC filing i) Complete a background questionnaire on all officers and directors. ii) Provide copies of all material contracts and agreements. iii) Provide a business plan or other information they have regarding their business. iv) Provide the internet address of their website. A. PCAOB audit of the financial statements B. File a Registration Statement in the proper format: Electronic Data Gathering, Analysis, and Retrieval System, or EDGAR C. SEC Review D. The SEC reviews registration statement but does not make any subjective on the merits of your filing. They review to assure that all of the information required by the rules and regulations is included. The SEC does not block registration statements. Will the SEC care if: Your company is a start up, early development stage company? NO. The SEC doesn t care about your stage of development as long as it s fully and accurately disclosed. Your company has no or little revenues? NO. The SEC doesn t care about your revenues or other aspects of your financial condition as long as it s fully and accurately disclosed. Your company does not have the money on hand to implement your business plan?

3 NO. The SEC doesn t care about your financial ability to implement your business plan as long as it s fully and accurately disclosed and you actually intend to implement the business plan described in your filing. Either you or one of your officers or directors has had a personal or business bankruptcy? NO. But it must be disclosed. Your stock is priced at $.01 or $10.00 per share? NO. But offerings at $.01 cause the SEC staff to pay more attention to your filing. You have a big firm or small firm advising me or auditing? NO. The SEC does not grant favors based upon the size of the firm representing you in the filing. As long as the auditor is a PCAOB member, the SEC doesn t grant any favors to large vs. small audit firms. The mechanics of the process are as follows: Thirty days after your initial filing, the SEC staff will issue a deficiency letter, called a Comment Letter. You respond to the comments by filing an amendment addressing all of the issues raised by the SEC staff The SEC then has another 30 days to comment on the amendment. Generally you will have 50% or fewer number of comments on the initial filing This process repeats itself one or two more times Your filing clears. The FINRA Process FINRA The Financial Industry Regulatory Authority, or FINRA, is the largest non governmental regulator for all securities firms doing business in the United States. However, FINRA focuses on different information that the SEC. FINRA does not focus so much on the disclosure and the financial statements in your SEC filing. Instead, FINRA s primary focus is on: How you offered and sold all of your stock and whether that process was done in full compliance with SEC statutes, rules and regulations. Whether or not your company is a shell company as defined by the SEC. Thus, in connection with filing of the Form 211 you will be required to submit: All documents related to the offering of your securities from the inception of your company, including copies of checks and subscription agreement. Proof that your company is engaged and in the future continues to engage in a valid business activity and is not a shell company. A shareholder list generated by a Transfer Agent.FINRA also focuses on whether there will be a viable trading market for you stock, In this connection, FINRA wants to know: Whether you have enough free trading shares to create a viable market. Whether you have enough non affiliated shareholders to create a viable market.

4 Whether your share ownership is concentrated in a few individuals, even if you have enough shareholders to create a viable market. Unlike the SEC, which through Regulation S K tells you with some specificity what you need to disclose, FINRA doesn t tell you anything. But practitioners will tell you that in general, FINRA will accept the following: Enough free trading shares: Estimates range from approximately 300,000 to 500,000, minimum. Number of non affiliated shareholders: Estimates range from approximately 30 to 50, minimum. Market concentration: Estimates are that if 10% or less of your non affiliated shareholders own approximately 90% of the free trading shares, you have unacceptable market concentration, but this is even more subjective than the first two points above. The Role of the Market Maker Filing the Form 211: Only a Market Maker can file the Form 211. Only the market maker can communicate with FINRA concerning the Form 211 filing. One of the most commonly misunderstood players in a going public transaction is a Market Maker. A "market maker" is a firm that stands ready to buy and sell a particular stock on a regular and continuous basis at a publicly quoted price. You'll most often hear about market makers in the context of the Nasdaq OTC markets. Many OTC stocks have more than one market maker. Market makers generally must be ready to buy and sell at least 100 shares of a stock they make a market in. As a result, a large order from an investor may have to be filled by a number of market makers at potentially different prices. Market makers also file Form 211 with FINRA to obtain a ticker symbol. There are many things Market Makers do not do, the primary of which are: They do not promote your stock. They do not raise money for you. Transfer Agents Companies are required to have a stockholder list certified by a Transfer Agent for the FINRA 211 listing application. Here s what Transfer Agents do: Keep a current list of all your stockholders. Process the paperwork when people buy or sell your stock.

5 Private Corporate Bonds Private sector bonds, frequently called corporate bonds, are bonds that companies issue to investors to raise funds for projects. Both public and private companies issue private sector bonds. Private sector bonds enable the corporations that issue them to invest in projects that they view as important to their development. Construction projects are a common use of the funds raised from private sector bonds, such as building a new factory or office facility. Issuers also use funds raised through bonds to purchase new equipment necessary to their business goals. Other bond fueled projects target a company's expansion in other ways. Corporations are more likely to issue bonds to raise money when interest rates are low, so that the debt costs them less. Business Agent then: 1) Initiates the process of a SEC Shelf registered corporate bond issue 2) The objective is to produce an investment grade bond. The route may pass through the high yield bond stage. 3) Consult with the clients counsel and auditors on prospectus/offering memorandum, debt indenture, SEC (ASC) registration filings. 4) Prepare through its agents prospectus/offering memorandum, debt indenture, SEC (ASC) registration filings. 5) Select and engage a trustee: 6) Select and engage a lead underwriter and formation of underwriter syndicate by way of Agreement Among Underwriters (AAU); 7) To manage the syndicates production the indications of interest (IOI); 8) To finalize bond price and terms; 9) To manage through the lead underwriter the CUSIP, ISIN, Euroclear and Clearstream registrations and DTC filings; 10) Complete the distributions and disbursements according to schedule and by way of the designed structure; 11) At close of the funding rounds pass compliance and reporting duties and responsibilities the consultant played a role in back to the sole domain of the client.

6 D) The client is required to: i) provide all documents, and information in order to prepare filing and registration documents; ii) iii) iv) enter into a trustee agreement; enter into a general security agreement with the trustee; enter in to an underwriter agreement; v) enter into a debt indenture agreement; vi) provide any and all documents and information and enter into all agreements required yet not for seen nor contemplated vii) to enter in and complete the process in good faith. E) Expediency. All parties would use all reasonable efforts to complete and to close the transaction as promptly as practicable thereafter. ventures.com Phone: info@execu ventures.com