Going Public - Choosing a Financial Printer

People sometimes assume that the biggest factor in the selection of a Financial Printer is the upfront estimate or bid. This could not be further from the truth, as the final invoice rarely bears any resemblance to the initial estimate. The vagaries of the Registration process with its many variables contribute to a highly unpredictable process.

In an effort to educate my clients, I have assembled this bullet-point checklist of the factors that will contribute most to a successful and efficient offering:

1. Typesetting Capability

One of your biggest cost factors will be the aggregate cost of the Deal Team's waiting time. Rapid and accurate turnaround time is paramount in keeping the Deal Team working as efficiently as possible. Look for aggregate number of typesetters in the printer's system. This can range from as few as 10 to upwards of 1,000. More is better. With single page addressability, a printer could theoretically send your 400 page document to 400 different typesetters simultaneously if necessary, thus insuring the most rapid turnaround time. Proprietary software automatically recombines and repaginates the document while maintaining version control. Additionally, a printer should have local typesetters in each office to take care of small changes on a real-time basis. This makes a big difference over the life of the project when the Deal Team is waiting around at $5,000 an hour or more!

2. Composition Engine

Look for a true "single source" typesetting system. This system outputs on demand in Word, Edgar I or II, Typeset, XBRL or PDF directly from the source document. This "single version of the truth" eliminates the risk of edits not being carried over between proof rounds.

3. Financial Strength

Being able to weather the test of time is key. You need to know that the printer with your document on its system is going to be around throughout your entire process! Registrations can drag on a year or longer depending on their reception in the SEC and the complexity of the deal, and losing a printer midstream could be disastrous. Additionally, a financially strong printer will continue to make investments in technology, people and processes.

4. Customer Service Team

A strong and experienced Customer Service Team is perhaps the most important element to a great printer. You need folks who have been there before, and can in many ways "check your work" as you go along. They can be useful for advice that your lawyer might charge for, such as form type recommendations for various situations. They can also give you perspective on how other companies have handled certain issues. This is a group you will be working cheek by jowl with throughout the deal, and if they are learning on the job, the tuition could be expensive.

5. Post-Offering Suite of Tools

Once you are a public filer, you are subject to a whole new set of disclosure requirements. A strong suite of self service tools can help automate this process in a timely and cost efficient manner:

A Section 16 Filer- This SAAS product automates Section 16 filings. It maintains Insiders' data, builds and validates each filing automatically, streamlines the approval process, and executes the filing with just a few keystrokes.

8K Filers- A SAAS 8-K filer is a secure, Web-based filing solution developed to allow you to create, manage and self-file Form 8-K and amendments with the SEC.

Virtual Data Room- This state-of-the-art online environment replaces the paper data room by enabling Dealmakers to bring parties together quickly and securely for due diligence.

6. Experience

There are small providers out there that claim to be able to successfully manage a traditional offering with a large working group. They claim to be able to do this at 30-50% of the cost of a traditional Financial Printer. My suggestion is to query the SEC database for REAL, domestic S-1 registration statements for the provider in question. I'm not talking about micro-offerings, reverse mergers, PIPES or selling shareholder S-1's. IF you find any, CALL the CFO of the company and ask him or her about their experience, and the ultimate cost. I think you will find this information very valuable. Do you want to trust your capital raise to an unknown quantity? Believe me, there are a lot of things that can go wrong and jeopardize the offering. Stick with an established printer.

7. Actual Cost History

If you really want an idea of the ultimate cost of your IPO, check the SEC database for what are called "Part II" numbers. This section lists certain costs attributable to the Offering, including investment banking fees, legal fees, and financial printing fees. Forget about misleading bids or what an interested party might tell you- see for yourself! This is also a way to compare average fees by each provider.

8. Conference Facilities and Amenities

Some printers are touting the ability to run the Offering "virtually." In other words, they claim that by not having office space they save money and can pass the savings on to you. The Offering process is characterized by an electronic sharing of information until the final push. At that time it is important for the working group to come together in a neutral, distraction free environment to get the Registration Statement over the goal line. There are a lot of final negotiations, group decisions, etc. that take place at hyper-speed during this time. As one lawyer said to me, "Do you really want your banker sitting in his own office in front of his computer, on two phone lines and blackberry while he's supposed to be on a conference call with the rest of the Team?" How about your lawyer? Get the group together. It's important for your group to be in an environment that invites focus while surrounded by the resources that they need to get the job done.

From a political perspective, try getting the underwriters' lawyers to spend a week in the company counsel's office. Not gonna happen.

Find your Switzerland- the Financial Printer's offices that are purpose-built for this type of transaction.

9. Your Representative

Your representative is the one who will be eating, sleeping and breathing the deal. That person is the number one point of contact for any issues or questions. Choose one with the dedication, focus and energy to keep things on the right track. A good printer with a weak representative could be just as unpleasant as the other way around.

Timothy M. Meade
RR Donnelley
Los Angeles
tim.meade@mac.com
310 795 2150

The Company Name Check Process - Avoiding the Pitfalls

A company name check is essential when selecting a name for your proposed company. A thorough check will inform you of relevant legal restrictions, and allow you to work with them in the quest for the perfect name. You should perform a company name check on every likely candidate for your proposed company name during the creative process, rather than just on the name you settle on. There is nothing worse than finding out that the name you have spent days choosing has already been taken or is otherwise restricted.

This article outlines how to perform a company name check to aid in your search for the perfect company name.

1. Company Name Check - Summary

In summary you should perform the following company name checks as a minimum:

o Check that your proposed company name is available.

o Ensure that the name is not a registered trade mark in relation to the goods or services you provide.

o Ensure that the name is not being used by a competing business that operates in your area.

2. Has the company name already been taken?

Check that your proposed company name is available for registration. No two companies can be registered at Companies House with the same name. Companies House may also refuse to register a company name which is 'too alike' a name already on the register. This is the first element of the company name check that you should perform.

3. Mandatory suffix

The suffix that must be added to your company name depends on the type of company you are forming. In the overwhelming majority of cases this will be 'Limited' or 'Ltd', but could also be 'Public Limited Company', 'Plc', 'Community Interest Company', 'CIC', 'unlimited' or their Welsh equivalents. Unless you qualify for a specific exemption, your company name must end with one, and only one, of these suffixes. It should also be noted that these suffixes cannot appear anywhere in the company name except at the end. Ensure that your company name check takes into account this mandatory suffix.

4. Sensitive or offensive words and expressions

If you want to use certain words in your company name such as 'International', 'British', 'Holdings' or 'Trust' then you will have to meet certain conditions and/or ask for the appropriate permissions.

Also, if your company contains an offensive word then Companies House will refuse to register it. They will also refuse to register a name where the use of such name would be a criminal offence.

The use of a company name check tool that checks for the availability of your proposed name and for both sensitive and offensive words is recommended.

5. Don't forget trade marks

The trade mark register is completely separate from the Companies House index of company names. Check them both.

A business may register a name which distinguishes their goods or services as a trade mark with the UK Intellectual Property Office (IPO), the European Community trade mark office (OHIM) or the World Intellectual Property Office (WIPO). The trade mark holder has the exclusive right to use their trade mark in relation to specified classes of goods and services.

It follows that if someone has registered your proposed business name as a trade mark, which covers some of the goods and services that you will provide, then you may be infringing their trade mark by using that name. In this circumstance you may wish to choose a different name to avoid the possible infringement.

You can search for registered trade marks on the Intellectual Property Office website (www.ipo.gov.uk).

A thorough company name check should always include a search the trade mark register in addition to the company names register.

6. Company names are unique - Business and trading names are not

If you register a company with Companies House then you will be the only UK company with that name. However, it is important to note that the Companies House register only contains company names, and that the majority of businesses in the UK are sole traders or partnerships - not companies. Neither sole traders nor partnerships are obliged to register their business name with Companies House, and there is no equivalent database of business names for sole traders or partnerships.

It is also prudent to company name check by carrying out a thorough search on the internet and in local trade directories (such as the Yellow Pages) to establish whether there are any other businesses using your proposed company name. Check as thoroughly as you can, and steer clear of names that are used by businesses that offer the same goods and services that you intend to offer, and that operate in your local area.

7. Is your chosen name available as a URL?

If you would like your proposed company's web-site address (URL) to include your company name then it is advisable to check whether that URL is available before forming your company.

The above restrictions undoubtedly constrain the creative process of choosing a name, but there are still plenty of good company names out there. Good luck with your search and don't forget your company name check.

The information provided in this article is intended as a general guide only. It is not exhaustive or tailored to your individual circumstances.

Legal Clarity helps small and medium sized businesses to comply with their legal obligations; offering a wide range of corporate services, including online company formation, shareholders agreements and VAT registration. For more information about performing a company name check, visit http://www.legalclarity.co.uk/company-name-check.htm

A Financial Analysis of American States Water Co

The utility sector is a typically unheard one. With only one company, Aqua America Inc, over one billion in terms of market capitalization, there may be some risk involved in purchasing some of these short-cap equities. Nevertheless, along with the likes of California Water Service Group and SJW Corp, one company, American States Water Co (AWR), has the solid fundamental base and business strategy to produce capital gains for your portfolio.

Relative to the information provided by Reuters, American States Water "is the parent company of Golden State Water Company (GSWC), American States Utility Services, Inc. (ASUS) and its subsidiaries, and Chaparral City Water Company (CCWC)." GSWC "is a public utility engaged principally in the purchase, production, distribution and sale of water in California." As illustrated, this company controls most of the business life cycle, allowing for a strong vertical control over its entire process. The one area which really stands out for me is its presence in California. With raging wildfires continuing to burn acres of land out there in the West Coast, along with meteorologists' predictions that 2007 will be the warmest year on record, water is going to be highly desired for the Golden State, and American States Water will be a huge component of trying to fulfill this need. In addition, the other break offs of this company such as American States Utility focuses on other dry states such as Arizona. And, because unusually high temperatures and drought conditions are not going to be restricted to only California, there is going to be high potential for these spin-offs to perform quite well in the next year. Furthermore, because AWR has grown share price wise in linear fashion since its IPO days in the early 1990s, further business will mean further growth opportunities and a continuation of a higher share price.

Now, while the foreseeable future looks very promising for AWR, the water situation will not be exclusive to only California and Arizona, but will have impacts across the entire United States. As a result, other water utility companies such as SJW and Aqua America will also benefit from the upcoming events. Nevertheless, what separate these companies from AWR are the fundamentals. Examining revenue, AWR has had increasing gross profit margins over the past three fiscal years. This has lead to a revenue per share of 15.86 according to Capital IQ which handily beats competitors Aqua America's 4.08 and SJW's 10.36. Furthermore, one of the most important indicators I look at, quarterly revenue growth, year over year, AWR has posted near 21% quarterly growth. This astonishing number easily beats out Aqua America's 11.30, SJW's 2.20, and California Water Service's 3.60%. Looking more down the line, this revenue number quickly changes to a net income level related to earnings which AWR seems to have a stronghold as well. Its forward P/E ratio of 24.5 easily beats out the industry's 28.3 and also beats out Aqua Water's 26.3 and SJW's 26.2 (SJW's forward multiple is actually up from its trailing ratio). This undervaluation can also be found with AWR's price to sales multiple of 2.5, enterprise value to revenue number of 3.6, and enterprise value to EBIDTA figure of 11.53. While these numbers may seem a bit high relative to the general market, comparing them to the industry, Aqua Water's respective numbers are only 5.69, 7.67, and 14.40, SJW's respective figures are 3.85, 4.78, and 13.28, and California Water Service's has a respective 2.51, 3.22, and 12.49. With the industry's price to sales multiple much higher a 3.4, there is some clear indication that the share price for AWR is too low for the given fundamentals.

The one area where there may be a bit of concern related to this company can be found to its ROE. With only a number close to 8.5%, a bit below the industry's average of 9.3%, it may seem that the company is not using the shares bought most efficiently. In addition, there also may be some concern regarding the below industry ROI of 2.8% and the same lagging ROA indicator of 2.55%. Nevertheless, AWR's main competitor California Water Service only as a ROE close to 7.6%, and the market leader of this industry, Aqua Water's ROE is only slightly higher at 10.6%. If AWR continues to see favorable weather patterns and continues to find growing sales year over year, Mr. Floyd Wicks and his near 570 employees should have no trouble continuing to be one of the main leaders, share price growth wise, in this industry. In addition, looking a bit more obscure but still relevant figures, AWR may have a bit of a liability to asset debate, with a current ratio of 0.75, but the long term debt to equity ratio of about 1, still illustrates that this company can take on debt, produce quite well, and still be considered undervalued. While it's true that some of the other companies in this industry have more solvency to their respective system, with a near positive linear growth pattern over the past 17 years, there should be not much reason to doubt this company--especially considering the industry it's in.

Therefore, with the solid business plan and secure fundamental attributes, there should be no reason to not consider committing some capital into this company. With a beta close to one, and a solid reason to believe the benchmark, the S&P 500, will do quite well in 2007, even with a current share price above the 50 and 200 day SMA, AWR is a solid, safe company to be involved with.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr

Sustainable Investing - Solar Energy

Growing up in the 80s and 90s in Canada, I experienced first hand how environmental consciousness was starting to catch on. We saw our first blue boxes (curb side recycling bins) in the late 80s. The schools were also really focused on education about the ozone layer, acid rain, and global warming. I even did a project on hydrogen as a fuel for cars. Environmental consciousness was really engrained into our minds.

For my current job, I typically travel a few times a year to the US, and I find it really suprisingly that most cafeterias don't have recycling bins or curbside recycling is almost non-existent south of the border. Most of my customers I speak with are embarrassed by this lack of initiative by their governments and it was then that I realized that without some form of legislation, it would be very difficult for any country to adopt a more environmentally conscious mindset. For example, you would think Germany would not be a very good country for solar energy generation. However, if you ever fly over some cities in Germany, you would see rooftops upon rooftops of solar panels. It's because the German government has provided subsidies for solar panel installations.

After watching Al Gore's Inconvenient Truth (I recommend the movie to anyone!), it became apparent to me that there's a real urgency in the matter. We are definitely on the path of destruction if we (the world) continue to use fossil fuels the way we do today. Recall my first post on the concept of stewardship (see link below). The Lord has granted us this world in its entirety for our benefit, but we also need to care for it. The earth is not ours, but the Lord's, and we are not the owners, but merely stewards. Therefore, it is our responsibility to sustain the earth.

Sustainable Investing

As an investor, how can I help sustain the earth? I call it sustainable investing. It is simply investing in companies whose products or services promote the sustainability of the planet. Companies providing technology for renewable energy is a perfect example. In particular, I will talk about solar companies in this post.

The biggest growth in the renewable energy sector could arguably be photovoltaics (PV or solar panels). A large number of public solar companies have or are in the process of ramping up their production significantly. For example, First Solar had a revenue of $134 million in 2006. For 2008, that number increased to $1.25 billion, growing almost tenfold! This type of growth rate is not unique to First Solar, but is similar across the board.

As production ramps up, the cost of each solar panel will decrease. We are at a point where solar panels will soon become cost effective even without government subsidies. With Obama's push to pass the environmental bill, the cap-and-trade system will greatly benefit companies like First Solar. What exactly is a cap-and-trade system? To put it in simple terms, the government places a limit (a cap) on the amount of greenhouse gases that can be emitted in the country. Companies and institutions are given a certain number of emission credits. If the company emits less than the credits it has in its possession, it is free to sell them (trade) to other companies that emit more than their credits allow.

The cap-and-trade system is technology neutral. It means the laws of economics will allow for various renewable energy technologies to flourish. The ones that are most successful will eventually replace the ones that are not, purely based on economics, and not whether the government decides to provide subsidies. This system encourages creative development of new technologies.

The Players

There are a plethora of PV manufacturers that are publicly traded in the various American stock exchanges. Some of the notable ones include First Solar (ticker: FSLR), Sunpower (ticker: SPWRA), Evergreen Solar (ticker: ESLR), and Suntech Power (ticker: STP). For a more comprehensive list of solar companies, check out the holdings of a Solar ETF by Claymore (ticker: TAN). This ETF invests in most of the major solar players out there. So, if you are lazy in picking companies, but would like exposure to the industry, this ETF may be your solution. As always with funds, you need to do a lot more homework to make sure all of its holdings do not engage in any questionable practices (see my post on ethical investing).

One of the leaders in the industry is First Solar. It makes solar cells out of cadmium telluride, which is a more cost-effective material than traditional silicon, but is also less efficient. Ever since its IPO in the end of 2006, it has been profitable. It's IPO price was $24 and it has never looked back ever since. Its stock price peaked at around $300 before the great crash of 2008 and is now sitting at around $120. By Rule #1 standards, it is a wonderful company! Its growth is spectacular and the profits rise along with it. In my opinion, the company is very undervalued and I hope to add it to my holdings in the near future.

The only solar company in which I have a long position right now is Evergreen Solar. It differentiates itself from others with its String Ribbon technology, where it uses up to 50% less silicon than do traditional technologies. In contrast to First Solar, it has seldom been profitable since its IPO in 2001. However, that may be a plus. Hear me out. According to Yahoo Finance, Evergreen's book value (value of the company) is $2.81 per share. Its share price is at around $1.70 at time of writing. What does this mean? If you are familiar with some of the ratios that are thrown around, you will have heard of the Price-to-Book ratio, which is widely used by value investors. The book value of a certain company indicates how much the company is worth according to its "books" (e.g. its buildings, equipment, cash, and other tangible assets). Therefore, if the company were to be liquidated, the book value is about the amount of money that the company would be worth.

Investors have been so depressed about Evergreen that the share price is now lower than its book value per share. The P/B ratio is 0.61. Let's take a look at some of the other solar companies' P/B ratios. First solar: 4.44, Sunpower: 1.90, Suntech: 1.55, Trina Solar: 1.49, Canadian Solar: 1.50, LDK Solar: 1.80, and the list goes on. To a value investor, this P/B ratio of 0.61 is definitely a call for attention.

Evergreen has a good product, but are in growing pains right now. It is trying to ramp up production, build factories, and make a profit all at the same time. It is definitely not easy. However, they have a big backlog of orders and a secured supply of silicon. The only things they need to do are to control costs and turn a profit. One catch is that they have $317 million of debt and only $86 million of cash, while still burning cash every quarter. It is definitely not a stock I would recommend to everyone, but if you understand the risks involved, there is little downside to this stock at a share price of $1.70.

Conclusion

So, should you invest in the solar industry? In terms of sustainable investing, it is definitely at or near the top of the list. According to renewableenergyworld.com, only 0.3% of the power generated in May 2009 in the US was from solar sources. I can see that number easily grow by 10-30 times. This is a great opportunity for investors. I believe we are on the cusp of a major shift in power generation, and here is an opportunity to take part in it. Imagine 30-50 years later, as you talk to your grandchildren or great-grandchildren about the early 2000s, they will look at you in awe when you tell them that we used to produce power by burning coal and oil. They will also look at you in great respect as you tell them that you were one of the first investors to embrace sustainable investing, to help the world become the faithful stewards that God had wanted us to be in the beginning!

Post on Stewardship: http://catholicinvestor.blogspot.com/2009/07/can-good-catholic-be-wealthy-part-i-of.html

Author Biography

Felix Wong is a candidate in Master of Theological Studies at the University of Toronto. His studies gives a unique perspective into the wonderful world of investing and stocks. You can read more of his articles at his blog at http://catholicinvestor.blogspot.com

Australian Stock Market Investing for Beginners

Investing in the share market and more specifically investing in the mining and exploration sector can be a rewarding and potentially profitable venture. We are seeing ever increasing interest in the share market because Australians now consider share investment as an essential part of their overall investment plan.

If you are interested in the resources sector and have an appetite to position part of your investment portfolio into a sector with the potential for higher returns, and a bit more risk, then consider investing in the resources sector via the Initial Public Offerings (IPO) process.

An IPO is when a company first issues shares to the public, for the purpose of listing on a stock exchange such as the Australian Securities Exchange. There are many reasons why the directors and shareholders of a company would want to go public, such as raising money for working capital, debt repayments, expansion or expansion through acquisition. In some cases, it may be an established company or partnership where the current owners want to convert some of their equity (ownership) into cash. Resource companies which we will be focusing on in this article usually list on a stock exchange to raise funds to finance exploration of tenements, new project acquisitions, administration costs and working capital.

Australia has a rich and prospective resource base, and is currently one of the world's leading resource nations. The Australian resources sector is made up of Minerals and Energy. In Minerals, we have explorers and producers involved with gold and precious metals, mineral sands, diamonds, iron ore and other steel related ores. In Energy, we have oil and natural gas, steaming and coking coal, coal seam methane gas and uranium.

If you are going to invest in an IPO then find yourself an experienced Investment Advisor that is an Authorised Representative of an Australian Financial Service Licence. You will need a good Advisor with industry contacts because when you invest via an IPO directly without an Advisor you risk being scaled back or not receiving an allocation when applying along with the general public. If you have a relationship with a full-service Investment Advisory firm then you can ask them to arrange a Firm Allocation to secure your place in any individual new share issues. A Firm Allocation is when your Advisor has reserved an allocation for his/her clients from the Lead Manager of the IPO or direct from the company intending to list. Another reason to use a full-service Investment Advisor is because they will want to only be involved in an IPO that they believe will be successful. The minimum subscription is usually a $2,000 AUD investment for a resource IPO, which at a share price of 20 cents equals 10,000 shares, or $100 profit or loss per 1 cent move.

Generally, the corporate advisor or underwriter will price the share issue at a discount to the perceived market value as a way to make the IPO attractive to retail investors, and to potentially ensure that the issue is fully subscribed. Your Investment Advisor will be able to give you their opinion of the company based on the prospectus and his/her own research. If you are purchasing an IPO via a full-service Investment Advisor then you do not pay any fees for their opinion or the firm allocation because they are paid by the company intending to list (usually disclosed in the company's prospectus). Please remember that you generally have to become a full client of the Advisor's firm before you receive their opinion on any individual investments.

A recent example of an IPO that I helped raise money for was Western Manganese Ltd (ASX Code: WMN). The stock listed on the exchange up 25% (up 5 cents) on the first day of trading, which is a very good result. I decided to raise money for this IPO from my clients because the company has a strong board of directors, it is an Australian based company focused in Indonesia, it is close to port infrastructure, and it has the potential for high-grade Manganese extraction to name only a few key points. Other reasons that I believe a Manganese investment is a good move, for my clients, is because ninety percent of all Manganese consumed annually is used in the steel industry as an alloying agent, and it is the fourth most used metal in terms of tonnage after iron, aluminum and copper. I also invested my own money via my personal trading account into the Western Manganese IPO.

I am regularly out and about talking with Perth based resource specific brokers, researchers, managing directors, geologists and corporate advisors to give my clients and myself the best information, IPOs, and investment recommendations possible. Finding the best resource investments takes plenty of leg work and extensive in-house research, which is why you need an Investment Advisor that specialises. I also use and benefit from out-sourced investment recommendations (non-IPO recommendations) from other full-service Investment Advisors, for my own personal account, which I happily pay full service fees to receive. When I give IPO allocations or advice to my clients, I usually only issue one or maybe two recommendations per month because this is about investing longer-term and letting the market do the work for us instead of trying to rapidly trade for short-term high risk results.

If you wish to potentially profit from investing in mining and exploration then this is the best time to start learning and becoming involved with this lucrative sector. If you are interested then read everything you can on the resources sector, and find yourself a specialist Investment Advisor.

We operate an IPO Investor Group for FREE via our website located at http://www.floatregistry.com. Alternatively, if you are interested in receiving our investment recommendations, please feel free to request our new client account forms by e-mailing your name and postal address via our above mentioned website, or free-call us on 1800 228 600 (International: +61 8 9274 0667)

Matthew Corica is a full-time private investor and managing director of licensed Western Australian based investment firm Titan Securities Pty Ltd AFS Licence: 307040.

This article has been written for educational purposes only. If the reader wishes to invest in any financial market due to this article then to satisfy any unforeseen disclosure obligations of the writer as an Australian Financial Services Licence holder, please link to and read the standard risk disclaimer located at http://shares.ozforce.net.au/disclaimer

Initial Public Offering Basics For New Investors

When a privately held company goes public via an Initial Public Offering, it is one of the most significant milestones in the company's entire history. The way it works is that the company issues share certificates to investors and gets listed on a chosen stock market. After the listing, the company's shares can be traded on the market.

It is an extremely complicated process with a maze of regulatory and compliance requirements. But the benefits, in terms of finance, are just as high. A successful and well-subscribed IPO can instantly turn a small regional company into an international corporate heavyweight.

The biggest benefit of an IPO is obviously the massive infusion of capital for financing ongoing operations and planned expansion of the business. It improves the company's liquidity position and helps reduce debt. There is also a big uptick in brand recognition and trust in the company's products and services.

The way an IPO works is that the SEC needs the company to file a registration statement along with a prospectus detailing every aspect of the company and its business. The prospectus will also include the company's post-IPO plans and how the company plans to utilize the funds.

Underwriters and the company's accountants are required to work together to fulfill these regulatory requirements. They will provide the management with advice on shifting from a private decision making process to a public company answerable to the board and shareholders. The most important thing the underwriters do is help decide the price and number of shares that the market can absorb.

There are significant post-IPO reporting and disclosure requirements for public companies. Publishing quarterly financial results and holding an annual shareholder meeting are two such examples. One big area where change is almost inevitable after an IPO is the management. Every company that goes public ends up hiring new executives who have experience in managing large public companies.

The success of a public offering largely depends on the growth potential of the company and its sector, and whether or not the business has sound basics and a revenue model. But many IPO's have failed inspite of having all this. It may be because they didn't choose the right market or the right price, or chose the wrong time to go public.

In Canada, for example, IPOs tend to be smaller than the ones in the US. They are also slightly under-priced because the market doesn't have the same strong appetite for risk. European IPOs have to look at a lot more factors and have a smaller window, since problems in any EU member nation can affect markets in all the other nations.

During the dot-com era, anyone with a website willing to fulfill the regulatory requirements could launch an Initial Public Offering and become an overnight millionaire. Things are different now, and investors are looking for a safe bet with long-term potential. The process of getting listed as a publicly traded company is long and hard, but the flood of money that accompanies a successful IPO is well worth the effort.

In order to grow and expand, many companies will go through the IPO process and make an Initial Public Offering (IPO) to the IPO Market. A new IPO valuation is usually made, and the IPO Canada are becoming more common nowadays.

Reverse Merger: A Vision Without A Strategy Is A Prescription For Failure

Many business owner with a dream to take their company public often

neglect to prepare and plan for the future, very few small and mid-size companies have a business plan.

A business plan is like a road map, and can be liken to when you go on a journey sometimes you need to change direction, it doesn't mean your destination changes, you are just getting there via a different route.

A vision is some thing that is birth in the mind and soul of the individual,

some people act on it and others procrastinate for a period of time only to see someone else take their dream and bring it to fruition.

The dream giver will only allow you to sit on your dream for so long before

giving it to someone else. You often hear people saying " I had that idea two or three years ago", what good is an idea without taking action, but with the action there must be a strategy.

Businesses don't plan to fail, they fail because they fail to plan. Entrepreneurs usually are visionaries who get an idea and run with it but, if

you look at the successful ones they always had a plan, and a team to help

them bring their dream to the market plece.

The team can sometimes get you to the top, but it's the strategy that takes

you over the top, so don't settle for second best, be the best.

If you look at a twenty year chart of Microsoft Corporation, or Yahoo Inc.

You will find that at one time their stock traded under a dollar but through

brilliant strategies they were able to accomplished great things.

Just like Bill Gates had a plan so must you develop one. Bill Gates also had

Paul Allen so must you find someone who can complement your weak point.

If you are not a good strategist go out and find yourself one who is not a yes man.

The phrase "no man is an island" is most applicable in the corporate

environment, where team work is essential for success.

In small companies the dreamer is required at times to do everything and

become efficient in every task, which is beneficial because he should know

the functions of every department in the company. But he should have competent personnel in those position in order for him to be able to see the entire picture.

This is where being a public company comes in handy, it allow the entrepreneur to use the company stock as an incentive to attract more

competent and better qualified personnel and retain them. It also makes

it possible for the company stock to be used for acquisition purposes.

Team work is essential in order to be able to succeed. I remember in the

1980's investing in a company the appear to have a dream team for it's management, everyone involved in management had a PHD and an ego to match it. A friend of mine who was the investment banker for the company related to me how he attended a meeting with the company and it was complete chaos, each person appear to think that their opinion was the only one deserving of consideration. Needless to say the company eventually file for chapter eleven.

An entrepreneur must check his ego and keep it under control in order

be able to lead those around him, nobody likes to work with an egomaniac.

I believe that meetings can be useful or a waste of time, if all you do at a

meeting is inform the staff of what you are doing or what you would like them to do, you are wasting valuable time that could be use to implement

the corporate strategy. This can be done with a memo.

In order for a meeting to be of some value it must include a free exchange of

ideas, a good leader seeks to know what those who are in the corporate battle field think. Because they are the one who are in the trenches, in a position to be able to hear what customers and employees are thinking and saying.

A good advisory service can sometimes be beneficial to assist in the evaluation of potential merger and acquisition candidates, to help identify

potential candidates for joint ventures, or investment. Also helps with the

due diligence process, the structuring of the transaction and the development

of corporate strategies for growth and investment.

A good advisory service will evaluate your company and advise you as

to the best way to go public, either traditional IPO, Reverse Merger or

Regulation D (504) offering.

Once the decision has been made on which method to use in going public

(for many small companies is either Reverse merger or Regulation D (504)

offering.) The consultant used, must be able to guide you through the intricacies of the public arena. And have financial industry contacts.

Don't sit on your dream waiting for the perfect situation because it may never come, had Bill Gates waited until Microsoft's public shares could

justify a higher price before going public, he might still be waiting.

Microsoft and Yahoo are not isolated situation but just two of many

who looked at the challenge and saw an opportunity. I guess the old saying

" faint hearts never won fair ladies " is still apropos today.

For additional information please contact Genesis Corporate Advisor.

www.genesiscorporateadvisors.com

josephquinones@genesiscorporateadvisors.com

Joseph D. Quinones, President of Genesis Corporate Advisors has spent over 25 years in the securities industry. In 1992 he founded JDQ Financial Group, Inc. and proceeded to build it up from a one man operation to the point where it employed many traders, advised numerous client and generate millions in revenues.