5/16/20

Dear Client,

Here is a little more information about the going public process in the US and other jurisdictions.

“Going Public” in the US, though a way to raise capital, is more importantly a leverage tool. As a leverage tool it is best used from the inception of any project as a multi-faceted way to “grow” your company which will in the long run (if done properly) allow you to retain a larger percentage of your own company than is usually possible by the “venture capital” route.

Used as a leverage tool it is a way to:

1)   Leverage a larger retention of ownership – as much as 80% ownership after raising hundreds of millions of dollars (compare that to Venture Capital and Private Equity)

2)   Grow your company faster and make it more powerful by attracting top personnel without necessarily huge cash outlays. (Sometimes these personnel bring with them, investment money, contracts, or clientele).

3)   Grow your company faster and make it more powerful by attracting top notch team members to your board of directors. (With the same implications as 2)

4)   Raise money faster and cheaper by increasing the “liquidity” factor for your investors.

5)   Grow your company faster and make it more powerful by increasing your ability to attract “mergers”, “acquisitions” and “strategic partners”.

6)   Grow your company faster and make it more powerful by increasing its ability to compete for large corporate or government contracts.

7)   Leverage your personal return on investment as an owner by decreasing the amount of time it will take you to make money on your investment, as well as increasing the valuation of your company by sometimes enormous multiples over the valuation of a private company, as well as, changing the liquidity of your asset to a much more liquid form than that of a private company.

8)   Grow your business faster and make it more powerful by increasing your status in the eyes of all those you do business with

If you are an existing profitable yet small company, some of the leverage points are:

• Increase the value of your company upon sale or exit strategy. Many public companies achieve valuations that are three, ten or even one hundred times or more the valuations of similar private companies with the same income and assets.
• Want to retire? Well, why sell your company for $5,000,000 with 20% down and a note for the rest while someone then proceeds to destroy your company and give you back an empty shell? Instead, take your company public, install professional management (there is your “retirement”), sell a piece of your now more highly valued company to get your entire $5,000,000 and still own 60% of the company. Now you can retire, get $5,000,000 and still control the company from the board of directors while still reaping dividends from operations in your retirement.
• Solve dozens of estate planning problems by simply taking your company public. Don’t want your lifelong project to be destroyed by greedy heirs? Take your company public and bequeath stock interests to your heirs. That way anyone who wants out can sell their shares rather than force a liquidation or sale of your company.
• And if you don’t feel like selling or retiring yet. Simply grow your company faster and bigger with all of the leverage points in the first section above.
• You see despite the lies that Wall Street top tier firms and personnel might tell you, it is ALWAYS in your best interest to go public NOW….provided of course you do it right. That’s where we come in – to help you do it right.

There are many ways to go public in the US and there are many different listings. The four major levels of listing are:

THE OTC MARKETS – PINKS: Often referred to as “pink sheets”, These companies are quoted electronically and although neither the FINRA nor the SEC require Pink companies to maintain current reporting status nor undertake costly annual audits, recently the PINK SHEETS implemented their own information reporting system requiring updated current information annually and upon certain events. Additionally, many brokers will not accept stock on account from companies that do not at least have Limited information on file with the OTC MARKETS.

THE OTC BB and OTC QB:   The OTC Bulletin Board is operated by the Financial Industry Regulatory Authority, Inc. (FINRA) and the OTC QB is operated by the OTC MARKETS and both require that all companies whose stock is quoted at these levels maintain their current reporting status with the Securities and Exchange Commission (SEC), which includes current audited financial statements and quarterly reports (10Ks and 10Qs).

THE OTC MARKETS QX: Operated by the OTC Markets it gives exchange like disclosure without the heavy costs of the US exchanges.

EXCHANGES: While the OTC PINKS OTCQB and the OTC Bulletin Board are excellent quotation markets, some clients are interested in trading on one of the more mature U.S. stock exchange markets – Nasdaq Small-Cap, Nasdaq NMS, NYSE or NYSE AMERICAN.  There are varying levels of qualification for each exchange including asset levels, number of shareholders, required Board level committees, and market capitalization. All exchanges require the company to maintain a current reporting status with the Securities and Exchange Commission (SEC), which includes current audited financial statements.  .  We can assess whether your company qualifies for one of these stock exchanges and, if not, help your company grow and obtain a listing when it does meet the minimum requirements for such a listing.  Typically, though, a client wishing to trade on one of these exchanges will need a minimum of $20 – 100 million in annual revenue and net profits of at least $2 million annually.

COSTS OF GOING PUBLIC – PRE-PUBLIC COSTS.

Our cost for a start up company going public FROM SCRATCH on the OTC is $75,000 and a 10% equity position in the company – and takes, on average, about 9 – 12 months or so to get listed on the OTC PINKS or OTCQB. Money raises (except for family-and-friends type raises and occasional high profile company type raises) for startups are usually done after the company is public.  For non-startups who wish to go public only, the cost is about the same. For larger companies with revenues and profits who wish to do a private placement or debt offering to raise capital before going public our costs run from $100,000 to $150,000 and a 10% equity position in the company – and takes, on average, about 3 to 4 months or so to complete a private placement then 9 – 12 months or so to get listed on the OTC PINKS or OTCQB. (Larger companies who satisfy exchange requirements can go directly to exchanges.)   

Companies with established business revenue streams over $25m annually can usually negotiate a smaller equity position retention. However, most all of the above prices are for companies designed by us that come with our unique structuring that resists typical dilution and shorting problems one encounters on many platforms and some exchanges. In situations where creative antidilution structuring is part of our services, our 10% would not be negotiable as our structures keep founding shareholders at levels approximately around 85% even after raising as much as $200,000,000.

Sometimes we can provide investors (or loans if you have good credit) to cover some of these costs. However, investors always want you to have something invested in the endeavor so tell us how much you can come up with towards our fees and we will see if we can find one of our investors who will put up the balance.  Remember however this will cost you extra equity and perhaps collateral depending on how much you come up with.

Additional costs. Our fees will cover our consulting services and will as we pay for all legal and corporate document preparation costs related to going public. (This would not include unrelated legal documents such as an “environmental opinion” if you were in an industry that needed that for example.) You will have to pay for your own accounting costs. (We can refer you to reasonable accountants if need be.) And you should plan on another miscellaneous $25,000 that will mostly come at the end of the “going public” period for a variety of services needed by public companies.

As you will see when you read this entire letter, after the company is listed on the OTC PINKS the value of a “primo” public company at current market is about $150,000 – $175,000 (+ equity retention), so your investment is secure if something should go wrong and you should change your mind. After you are listed on the OTC PINKS, for about $20,000 in legal fees you can then do a filing to move you up to the OTC QB or OTCBB if you wish, which can increase the value of your public company to about $450,000 to $ 500,000+ (+ equity retention) if something should go wrong and you would have to liquidate it.

Also, I would like to remind you of our services, most of which come with the consulting fee you pay, are included in the price of the public company merger transaction. We provide you with a public vehicle and besides providing a public vehicle, we also provide complete back up services. We provide structuring of your deal to make it attractive to the particular investment community you are dealing with. We pay for all the legal work to obtain a quotation for your company on the OTC.  We will help you put together the “team” of professionals that will be working for your company on the “public corporation” side of things. We provide Market Maker introductions, Investment Banker introductions, CPA introductions, SEC Attorney introductions, Investor Relation Firms, and Media Placement Firms introductions as needed.

We can also make introductions to support the growth of your business on the business side of things. We can assist you with the introduction of potential acquisitions candidates.  And we have numerous business plan writers, management consultants, marketing consultants, international franchise and licensing specialists, etc., who are experienced with public companies as well as the full range of companies from small start up operations to large companies such as fortune 500 companies.

We are available for “ongoing” consultation for your company. We will assist you in structuring your company and in growing your company to make it attractive to the investment banker community. (This includes consultation with regards to acquisition strategy, key and “power” personnel attraction strategy, and “business plan” strategy.) We have many contacts with all the professionals needed in the public arena, many of which are our existing clients; and because of these existing relationships with clients (such as SEC attorneys, investment bankers, market makers, and investor relation firms) we are well informed in all the important issues to such professionals. We are independent of the team we help you assemble and stand ready to protect your venture by supplying new, additional, or replacement team members in case any “team” member doesn’t perform.

The time line for an OTC public company from scratch would go something like this.

1) Listing agreement signed.

2) Formation documentation, turning over of corporation to new officers and directors. (~ 3-4 weeks)

3) Formation of free trading shareholder base by private placement. (~3-8 weeks)

3A) (Private placement could be done here to raise capital for companies with revenues.) (~13-18 weeks)

4) Registration of shares by S1 or other registration process. (30-40 weeks)

5) Preparation of Market Maker due diligence pack. (4 weeks)

6) Meet with Market Maker. Give Market Maker due diligence pack. Market Maker review. (~ 1-2 weeks)

7) FINRA review process, answer deficiency letters, etc. (~4-12 weeks) (During this time, we would meet with IR firms to line up market support for the company once listed.  We can also begin talking to Investment Bankers to do a private placement during this time.)

8) LISTED. (Estimated time since merger agreement signed approximately 44-56 weeks)

9) TRADING activity.

10) Private Placement, or DPO to raise capital if not done in step 3A.

Of course, the above time estimates are actual but aggressive and assume all requests we give the company for information are answered in 24 hours, and attorneys, accountants, market makers, investment bankers, IR people all respond quickly and efficiently. Usually however, people get bogged down on answering a few question and people just aren’t as efficient as

you would like them to be, so you might add some time on to the entire process to account for the “inefficiency” factor if you want to be conservative in your own time estimates.

An alternative route which would be more expensive yet faster would be to purchase an existing trading public company.

The current market for OTC PINKS runs from about $75,000 for the bad PINKS to about $175,000 for the primo PINKS. For OTCBB and OTCQB companies it is about $ 250,000 for the bad OTCBBs and QBs and $450,000 – $500,000 for the primo OTCBB and QB companies. These prices are the prices usually quoted for a 90/10 deal, however, that is always negotiable depending on the deal. In this market you usually get what you pay for.

We define “bad” as a public company having one or more of the following features: 1) having been operated as a shell, 2) with an unfriendly shareholder base that has lost money and is waiting to “sue” the company or “dump” any stock they retain, and 3) with a large float (millions of shares) consisting of unfriendly shareholders, or unknown shareholders, or sellers who are looking for a quick dump of their stock and/or 4) with technical difficulties, such as behind on significant filings, SEC lawsuits outstanding, delisted, etc.

We define “Primo” as 1) never having conducted business as a shell, or having recovered  from shell status by doing appropriate filings and waiting the appropriate period of time, 2) original small, friendly, shareholder base intact consisting mainly of friends and relatives of the public company owners who were investing with a long term view, and 3) a small float or alternatively a larger float consisting of friendly “long term” shareholders who will agree to “leak out” “lock up” schedules.

We think it is obvious to a professional like yourself that a primo public company, though initially costlier, is cheaper in the long run.

As noted above, besides providing a public company, we also provide complete back up services to take a company public. We provide structuring of your deal to make it attractive to the investment community. We put together and supervise the “team” of professionals that will be working for your company on the “public corporation” side of things. We provide the legal team to do all the legal work for the 15c211 filing to get the company listed (included in the price of the public company). We can provide attorneys to do future legal work for offerings, etc. at “wholesale” prices. We provide Market Maker introductions, Investment Banker introductions, CPA introductions and Investor Relation Firm introductions as needed.

As noted above, we are available for “ongoing” consultation for your company. We will assist you in structuring your company and in growing your company to make it attractive to the investment banker community. (This includes consultation with regards to acquisition strategy, key and “power” personnel attraction strategy, and “business plan” strategy.) We have many contacts with all the professionals needed in the public arena, many of which are our existing clients; and because of these existing relationships with clients (such as SEC attorneys, investment bankers, market makers, and investor relation firms) we are well informed in all the important issues to such professionals. We are independent of the team we help you assemble and stand ready to protect your venture by supplying new, additional, or replacement team members in case any “team” member flakes out and doesn’t perform.

The estimated time line for acquisition of a listed public company goes something like this:

1) Terms discussed verbally. Verbal agreement attained 1-3 days.

2) Verbal agreements put in contract form for formal signing. Contracts approved. 1-3 days.

3) Signing of contracts and good faith deposit (usually $50,000) forwarded to sellers.

4) Closing: OTC PINK 3-7 days. OTCBB or QB  14-120 days. Balance of transaction fees upon closing.

COSTS OF GOING PUBLIC – POST PUBLIC COSTS

After you are public, you will have routine costs in several areas.

If you are a reporting company, you will have to have audited financials at least yearly for your 10k report, and financials (un-audited) for your quarterly 10q. Cost on these will vary with the company. You should contact the company accountant for an estimate. If you are on the PINK sheets you do not have to have audited financials, but you may want to have them anyway, if you are planning on moving to a higher level or quotation or listing in the future.

If you are a reporting company, you should plan on at least $25,000 – $50,000+ a year in legal and other preparation fees to comply with your reporting requirements. The cost here really depends on the size of the company and the complexity of the reports. The above figures are typical costs for newer emerging companies.

If your company wants to raise money, it will most likely (but not always) have to prepare various filings to do that. Preparation and legal fees for a private placement are usually $10,000- $20,000, for an SB-1 perhaps $25,000 – $ 50,000. Again, these figures are for emerging companies doing a typical offering. If you were a huge Fortune 500 type company doing an offering in 50 states it might cost you $300,000 to $500,000 in legal and preparation fees.

If you are a PINK sheet company, PINK SHEETS reporting requirements will cost the company about $5,000 a year.

If you are a PINK sheet company looking to become a reporting company it will cost about $20,000 in legal fees to do the proper filing.

You should have an attorney review all contracts and press releases before they are signed or go out. This should cost the typical company about $5,000 a year depending on your activity in these areas.

Investor Relations firms will run you about $10,000 a month for a typical good firm. You can get some for as little as $5,000 a month or as much as $30,000 a month.

All of the above are cash estimates. However, many people will work for stock rather than cash once you are a public company. One of the services we provide is to help you secure attorneys, investor relations firms, investment bankers, etc. on a budget you can afford. We can give you referrals to those who will work for stock and those who won’t. We can educate you when it is not a good idea to give stock for work and when it is acceptable.

Re: Frankfurt/Berlin/Worldwide Stock Exchange Listings

Frankfurt and Berlin and other World-Wide Stock Exchanges are definitely a viable alternative and/or supplement to the S-1 IPO Registration or “reverse merger” method of “going public” in the US.

Companies from the US, Canada, Australia, Africa, China, India, Brazil, Chile, etc. have formed Canadian, UK, Swiss or other holding companies to use as a vehicle to list on the Frankfurt and other worldwide exchanges.

We have been taking companies public in the US for about 35 years now, but since 2008, when the US economy started having major problems, and when we first got connected to German investors who funded many US companies for us, we have come to realize the power of being an “international” player. Given the state of the world, with communication to any part of the world being not only practical but “easy”, we have developed an international community for taking our clients public around the world, tapping into sources of money around the world.

Right now, we feel the best strategy for going public is to achieve multiple listings on several international exchanges.

We have proprietary “international” solutions which allow you to:

• Go public in as little as 120 days on a foreign exchange and get funded in as little as another 60 days;
• Be listed in several countries at once – including the US, without US and SEC rules having jurisdiction over your entire structure. This allows you to take advantage of rules on other exchanges like the German exchanges which allow for immediate free trading stock (no holding period) and no bar on affiliate sales (affiliates can sell immediately and as much as they want);
• Prevent and eliminate the bad effects that “shorting” by market makers, as is usually practiced on the US OTC, creates;
• Hold an attractive price for your stock rather than the penny and sub-penny prices that US OTC stocks often fall to;
• Keep control of your company. Get funded without dilution beyond a set acceptable amount no matter how much money you raise;
• Do mergers and acquisitions of other companies without losing control of your company or going beyond a set dilution upon merger or acquisition;
• Attract private “investors” by creating investment grade securities that are guaranteed to make a profit – yes that’s right – you can guarantee the investment will make a profit;
• Solve problems you may be having with note holders, existing investors, factors and others;
• And more.

Right now we can take companies public on any of the US Exchanges or OTC, as well as the Bermuda Stock Exchange, The Australian Stock Exchange, the London Stock Exchange and AIM, the Aktietorget Stock Exchange in Sweden, the Cypress Stock Exchange, the Vienna Stock Exchange, the German Stock Exchanges – Frankfurt, Berlin, and Stuttgart , –  the Toronto Stock Exchange in Canada, the Dubai Stock Exchange, The Singapore Stock Exchange, and the Hong Kong Stock Exchange.

All of the above stock exchanges can provide liquidity to a public company listed there. Which exchanges you should list on first depends on the type of company you have and the particular strategy we would work out for you.

The main advantages of a multi-national listing approach are that you are no longer reliant on any one country or economy. By tapping into multiple exchanges, you are hedged against sudden negative events in the public sector such that have recently happened in both the US and Germany.

Once you get listed on one exchange, you raise money which then funds a listing on another higher and more prestigious exchange. Once you get listed on the first exchange, it then also becomes an easy matter to get a dual listing on multiple exchanges as another way to raise initial funds.

Going public in the US is still a good and relatively cheap alternative. However, US listings take longer than most other countries. A listing on the OTC can take nine to twelve months to achieve.

Listings on many other international exchanges can be had in as little as four months. Dual listings on German exchanges, which have liquidity comparable to the US OTC, can be achieved in as little as four months.

What we usually recommend is getting listed on a fast exchange, such as Bermuda, which can then lead to a quick dual listing in Germany. After obtaining funding in Germany, one should expand into and raise money on other international exchanges so that your company is set up to always be in a liquid money raising market in the future.

Costs for going public in the US or on other exchanges can be as little as $75,000 out of pocket for legal, accounting and filing fees. It depends on your company, the country and exchange we are filing on and what you are doing. On average it costs about $75,000 – $150,000 out of pocket expenses plus stock in your company to go public. Sometimes we can provide investors (or loans if you have good credit) to cover some of these costs. However, investors always want you to have something invested in the endeavor so tell us how much you can come up with towards our fees and we will see if we can find one of our investors who will put up the balance.  Remember however this will cost you extra equity and perhaps collateral depending on how much you come up with.

Shell companies, existing public companies with no business in them, can also be acquired in most countries for those who are in a hurry (not a good option in the US unless you know what you are doing). Public company transactions can sometimes be closed in a matter of weeks as opposed to months. Shells range in cost from about $150,000 to $600,000 depending on the exchange you are interested in. If you have that kind of budget and are interested in a public company transaction let us know and we will get back to you with a list of companies that are available for purchase.

STRUCTURING SERVICES

One of the specialties we bring to the table for our clients is our structuring services. Structuring is a little known but extremely powerful tool that when combined with a public company can move mountains. We are structuring specialist – In general, companies are restructured or are structured upon formation to deal with a particular environment (Like shorting on the US OTC) or to protect shareholder equity and to prevent shareholder dilution during intense money raising stages.

However, structuring is a solution that has many uses, for example:

We have structured anti-dilutive control blocks along with investment grade securities that future investors do not protest, but still allow the founders never to go below 51% to 80% ownership and voting control of their companies.

We have structured acquisitions where negotiations were impossibly broken down.

We have structured investment shares that resist shorting, and market slippage. They go up in value even when the stock is being shorted down, or simply falling down.

We have structured arbitrage preferred shares, principal and interest guaranteed by investment grade government securities held in escrow paying 3% interest and netting a 10-50% arbitrage.

We have structured arbitrage preferred shares as above with international currencies and yielding even higher interest rates and hedged against currency risks.

We have structured corporate bonds with principal and interest secured by investment grade securities.

We have structured preferred securities to remove debt from the balance sheet while still protecting the debt investors.

We have solved problems with creditors by designing unique preferred shares that satisfied the concerns of all parties.

We have structured corporate hierarchies which allow companies to go public in multiple international jurisdictions without conflicts, thus enhancing liquidity and increasing the pool of investors the company can tap into.

How about draw down funding like equity liens and other PIPES? Ever been offered one of these so called “death spirals”? Well we have the structure that will allow you to accept this kind of funding and survive its negative effects.

Practically anything you can think of can be handled by a structuring analysis and we invite our clients to present us their needs when going public, no matter how unique they may consider such needs.

FUNDINGS

Initial fundings for startups tend to be through draw down fundings and other market related fundings after you are public. Before you are public you must rely on family and friends type of offering and creating and working relationships which we educate you how to do. Once you are public we have several broker dealer – US and International – that do firm draw down funding commitments from $1 million on up. We can often get a firm commitment from these firms even before you finish going public. Again, once you are public, we have other firms that will buy blocks of stock and/or notes from shareholders of listed and trading companies.

For non-startups, we have relationships with broker-dealer and investment bank clients who like our structuring. If you have at least $5m in revenues and positive EBITDA and are seeking to raise at least $10m, we can often bring in one of our broker-dealers or investment banks to do a private placement before you go public (but depending on signing a contract to register the shares within 120 days of completing the private placement – usually by an S1 registration.) If you are already a public company, we can bring in these broker-dealers or investment banks whose funding will usually depend on simply adopting and utilizing our restructuring services. There is no limit to the size of your funding. Our broker-dealers and investment banks are capital of fundings in excess of $1b USD. Over the years we have been doing this we also have developed relationships with the CEOs of 8 of the top 10 investment banks.

For Pink Sheet clients in the US, we have several investors who do Reg A fundings of up to 50 million dollars. There are no upfront fees associated with the Reg A fundings but you will have to pay for legal work which may run $15 -25K.

For Shareholders of OTC Pinks and OTCBB/QB companies, we have block purchasers who will lend on and/or buy blocks of stock from shareholders.

For OTCBB/QB clients and Pinks Sheet Clients who are moving up to the OTCBB/QB, we have EQUITY LINE funders who will provide the company with a firm commitment to fund from 5m to 20m for the company via an equity line.  Firm commitments can be obtained in writing for an additional cost of about $15,000, which is paid directly to the EQUITY LINE funder. Equity lines require an S1 filing to be effective, which usually run about $25-40k for legal work.

For our PINK SHEET, OTCBB/QB, and higher exchange clients we also have REG S fundings available at very good rates. REG S fundings are available on both “best efforts” basis and “firm commitment” basis from about $2 million on up to $20 million.

We also have several banks that will do loans against stock shortly after you get listed and before you start trading for select companies. After an initial funding the same banks will arrange for fundings via stand by letters of credit or bonds for larger transactions ($20 to $100 million).

We have other broker dealers who will do a firm commitment S1 and/or a 1001 or Reg A Exemption funding in the US.

We have many sources for PIPES and PRIVATE PLACEMENTS. Once you are public, we can arrange road tours in Europe, the US and Asia with investment firms and “Billionaire” investors for medium to large size investments. PRIVATE PLACEMENTS can be for both debt (bonds) and equity (stock) instruments.

IPO’s can be arranged on Germany’s Prime Standard, or Dubai’s Exchange for larger companies that are seeking a minimum of $50 million and above.

UNSECURED BUSINESS CREDIT LINES are also available from $25,000 to $500,000 for clients with FICO scores of 780 and above and ability to service the loan.

401(k) and IRA FUNDINGS – We can arrange to service any investors you may have with 401(k) plans and IRA plans.  We can arrange to make our services and investments into the public companies themselves qualified 401(k) and IRA investments.

Preferred share Fundings – We can also arrange to service any investors you may have with preferred share fundings that are designed to protect the investor and guarantee him a profitable return no matter what happens to your share price.

Institutional Investor Fundings – we have thousands of connections with institutional investors. Many times, institutional investor fundings can be arranged shortly after the company goes public. Raises can be done for fundings from $1m to $100m+.

SENIOR CONSULTANTS

Why use Artfield Investments RD, Inc. to go public? Good question. Visit our website FAQ page https://artfieldinvestmentsrdinc.info/blog/faq/  for a thorough answer to that question. But let me just state one reason here.

We are able to assume the role of senior consultants to your company or client. That is to say, we have the ability and skill to evaluate all your advisors and co-ordinate all your advisors into an agreed upon course of action. One of the most confusing things you will encounter without a senior consultant is that there are many different philosophies in the “going public” arena. There are many ways to go public, and many different and equally valid approaches to doing things. The problem is you have to have consultants who all agree on the same course of action. If you have one consultant telling you to do an IPO while another screams at you NEVER do an IPO, while another says do a “reverse to handle the short sellers,” while another says do a “forward split to handle the short sellers,” your life as an executive can get confusing.

The purpose of the senior consultant is to educate management, not manipulate them. The senior consultant has to be a consultant(s) or firm(s) who is(are) familiar with all aspects of going public and can talk “legalese” to your attorneys and “market making” to the market makers and “investment banking” to the investment bankers.

The senior consultant has to be familiar with all the different philosophies in each advisory field and know how to educate management with the various philosophies and approaches and the benefits and pit falls and self-interest motives involved in each. The senior consultant should educate management so that management can make educated decisions which will result in coordinated team members all on the same game plan.

The senior consultant should be able to educate other team members when necessary, and when they are not easily educated, the senior consultant should be able to advise which team members should be let go because their philosophy does not fit with the rest of the team or their philosophy is not current.

BEWARE: The biggest mistake we see is the company letting a person who is not qualified to be a senior consultant act as a senior consultant. Thus, we see companies letting an attorney who doesn’t know much more than the legal viewpoint acting as a senior consultant. Or worse yet, we see companies letting their investment banker or money raiser, or IR professional act as the senior consultant. The people who invest in you have as their first and foremost objective to get their commission or their money back. Your company’s interests and well being comes in second place (if even that).

OPTIONS/ RECOMMENDATIONS

You have several options available to you.

1) A premium OTCQB public company can be acquired immediately for $450 -$500k. You could raise up to $5 – $10 million on market raises within about 6-9 months of going public with an OTCQB and be eligible for some institutional raises and institutional private placements for up to $100m in addition.

2) Go public from scratch. The advantage of course is that it is cheaper ($75k-$150k) and cleaner as there has been no one in the public company vehicle but you. However, it usually takes at least 9 – 12+ months to go public direct to the OTCQB from Scratch. Best option if you are not in a hurry to be public. Poor option if you are. However, many clients can raise money during the “going public” 9-12 months. We have seen start-up clients raise as much as $10million during this stage before we get them public. And of course if you are an existing company with revenues and profits we can often do a private placement and get you all the money you need before we actually get you public.

3) You can acquire a premium Pinksheet listed public company for about $175k and either do a Reg A for up to $50m USD or pay about $20k to move the Pinksheet company to the OTCQB and do a raise there as (1) above. Either strategy will take about four months to do.

4) European listing – GO public on a foreign EU exchange have more latitude as owners of the company to sell stock and raise capital in the 5m to 10m range. A European listing from scratch can be achieved in about 4-6 months so it is faster, but more expensive. Cost is about €75k – €125k (Euros = $105k – $175k USD) depending on jurisdiction chosen. You will also be eligible for some institutional raises and institutional private placements for up to €100m+. Europe is generally quicker and faster to raise money.

5) Go public on a foreign listing and come back to the US on a foreign listing on the OTC Pink Sheets. The advantage is you can go public from scratch quicker (3 – 4 months) and have two markets to raise money in. The cost factor is the same as just going public in Europe €75k – €125k (Euros = $105k – $175k USD).  The advantage of the foreign “come back to US” listing is that US investors and broker dealers like foreign listed companies. Take a look at the OTC volume charts each day. Foreign listed companies and Foreign Deposit Receipts comprise about 1/2 of the volume leaders each day while representing only 20-30% of all listings.

6) The last option we will mention is that we have some Pinksheet companies that will do a merger with you then spin you off into your own public company. It will cost you about $50k to go pubic this way but the advantage is you will be part of a public company immediately like option a (1) and (3) above but it will cost you much less. These companies will usually let you use their stock to raise money immediately on terms that give them some sort of split (like 80/20 – you get 80% they get 20%). When they spin you off into your own vehicle they usually keep 10 -20% depending on whether they helped you raise money or not.

Which of these options are best for you depends on your goals, timing and costing factors?

In all cases when going public from scratch, you are hedged and cannot lose money as the public company you are creating will end up being worth more than what you are spending to create it.

IF YOU HAVE ANY OTHER QUESTIONS PLEASE CALL. 

For All of your INCORPORATING needs contact Samuel Wierdlow Inc. (www.SamuelWierdlowInc.info)