| ign="center"> | | | | destroying the share price. |
| A direct public offering is when a company raises | | | | This make DPO a preferable option even for |
| capital by selling its shares directly to what is refer to | | | | companies that don't need financing but would like to |
| as affinity groups, unlike an IPO which are sold by a | | | | go public. If you are in the kind of business that keep |
| broker dealer to its customers and the general public | | | | records of your customer in order to bill them or for |
| through other broker dealers who have customers | | | | follow ups you already have a head start. |
| interested in buying shares in the company. | | | | You must be able to contact those affinity group in |
| In IPO's you have a firm commitment underwriting, | | | | order to market the shares to them, a popular |
| where the underwriters promise to purchase the | | | | business that has a lot of client but does not have |
| securities for their own account if they can not sell | | | | the contact information is at disadvantage because |
| them to customers. | | | | it's unable to contact its customer. |
| Best-effort underwriting: The underwriters do not | | | | There are other ways to market the company's |
| guarantee any specific number of shares to be sold, | | | | stock for example a medical supply company might |
| they merely act as brokers. | | | | try contacting doctor in the area or by purchasing a |
| In an IPO the lead underwriter is refer to as the | | | | mailing list. |
| syndicate manager, he keeps the book and invites | | | | But the best way is when you have an established |
| other broker dealers to join the syndicate. In an firm | | | | relationship with your affinity group and are in |
| commitment underwriting, an eastern underwriters | | | | constant contact with them, by mail, newsletter, or |
| agreement makes members liable for any unsold | | | | email. |
| securities, regardless of how much of their allotment | | | | Sometime a supplier or distributor may want to |
| they sold. The eastern underwriting agreements have | | | | purchase an interest in the company in order retain |
| joint and several liability. | | | | the business and keep competitors from stealing the |
| A western underwriting a agreement: In a firm | | | | client. |
| commitment underwriting, it makes underwriters liable | | | | A DPO does not always require audited financials but |
| severally but not jointly. If one syndicate member | | | | if you plan on going public you will need them. So you |
| can not sell its entire allotment, only he must buy the | | | | must hire an auditing firm. A foreign company must |
| unsold securities. | | | | use a Certified International Accounting Firm. |
| In a direct public offering the company sells the | | | | A good Attorney that has experience with Direct |
| shares to affinity groups, who fall in this category? | | | | Public Offerings, one that is familiar with the process |
| Customers, suppliers, distributors, friends, employees | | | | and does not have to waste time researching and |
| and other members the community. | | | | learning. |
| In a direct public offering the company place its | | | | You must prepare sales material that provides a |
| shares in the hand of those people who are familiar | | | | good deal of information about the company, you |
| with the company and know the company's product | | | | want investors feel that your company has a future. |
| and management, and are most likely to hold the | | | | You should always have a business plan, it will show |
| shares longer because they feel comfortable with the | | | | investor that you have strategy for making the |
| company's prospects for the future. | | | | company succeed and doing it one step at a time. |
| Direct public offerings are considerably less expensive | | | | By setting dates for the implementation of each step |
| than IPO's and most effective for smaller offerings, | | | | in your plan it shows investors that you have things |
| for large offerings the sales staff and customer base | | | | well under control, but allow some time in case you |
| of a broker dealer are usually necessary. | | | | must make adjustments. |
| Since the affinity group is already familiar with the | | | | If you wish to take your company public then you |
| company and its practices it doesn't put pressure on | | | | must file a form SB with the Securities and Exchange |
| the company to change the way it does business, | | | | Commission and a form 15c211 must be filed with the |
| and will remain loyal to the company because of it's | | | | NASD. |
| presence in the community. | | | | A DPO is an alternative to an IPO or Reverse Merger |
| DPO's are preferable to venture capital financing | | | | for a company wishing to go public or obtain |
| because it allows the present management to | | | | financing, it allows the company owner(s) to call the |
| execute its business plan without outside | | | | shots instead of an underwriter or a shell owner. |
| interference. When a small company turns to a single | | | | We assist companies in going public through Reverse |
| large investor they tend to surrender the freedom to | | | | Merger, DPO and assist them in finding an underwriter |
| make all the decisions. | | | | if the company prefers and IPO. |
| In a DPO like other method of going public today | | | | Which one is right for you? We can help you decide. |
| audited financial statements are required, unlike a | | | | Joseph Quinones is President and founder of Genesis |
| reverse merger you choose your shareholders and | | | | Corporate Advisors, prior to that he was President |
| you don't have to deal with shady, unscrupulous shell | | | | and founder of JDQ financial Group, Inc. a full service |
| owners. | | | | broker dealer which Mr. Quinones proceeded to build |
| Shell owners usually keep between 5-15% of the | | | | up from a one man operation to the point where it |
| shares outstanding and are quick to liquidate, and | | | | employed many traders, and advised numerous |
| besides they do not have an interest in the well | | | | clients while generating millions in revenues. |
| being of the company's share price. Even if you insert | | | | We assist companies in going public through Reverse |
| a stipulation in the contract that they can not sell for | | | | Merger, DPO and assist them in finding an underwriter |
| a year they will find a way of shorting the stock and | | | | if the company prefers and IPO. |