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As a global corporate strategies firm we are beginning to get many inquiries from foreign corporations that wish to take advantage of the rapid growth capabilities of trading stock in the US. Getting set up with a consulting firm that specializes in fund-raising mechanisms such as private placement memorandum, direct public offering and/or taking one’s company public on the OTCBB can help a foreign entity obtain virtually instant gratification of raising large amounts of capital in an expedient manner.

Chinese companies typically have similar questions and concerns when they contact us such as: How long does it take to go public? What are my options for raising capital with a US structure? Do I need to have an American corporation? How much equity should I give up to the public? Can I merge my Chinese company with my American company to strengthen the American corporation’s asset value? And How do we sell the stock to the public once we have a symbol and are ready to trade?

How long does it take to go public? To go public on the OTCBB you need to have a solid business plan and corporate structure, usually a pre-public round is done with a Private Placement Memorandum to offer discounted stock in return for equity seed capital that will fund the ‘go public process’. This process can take a few weeks to a few months, it all depends on the deal and what you’re offering the investors at this stage. Next you’ll want to do your third-party audit and your S1, after your audit is done and your S1 is filed you’ll enter into the ‘comments’ stage where the SEC is going back and forth with you or your lawyer or your consultant (whoever is helping you go public). The comments stage can be anywhere from a couple weeks to a few months, the more unorganized the company, the longer the audit and comments stage will take to complete. The average for an organized company with the audit and S1 prep done simultaneously is around 4 to 6+ months (the more unorganized the company the longer it takes).

What are my options for raising capital with a US structure? Raising capital in the US happens quicker than in other countries because of the vast wealth in North America and its position in the global market place. Invest-able deals are all in the eye of the investor. The challenge is getting in front of investors with a track record of investing in your particular industry genre.

Do I need to have an American corporation? Yes, to go public in the United States, you need to have an American corporation. This doesn’t necessarily mean that it has to become your primary corporation. You can use one corporation as your operational entity and one as a subsidiary but to strengthen and stabilize your share price you’ll need to eventually show growth and assets in your US entity.

How much equity should I give up to the public? This is a decision that will be made with your attorney and Board of Directors and the decision is based off of your company’s industry position, the value of empirical assets like equipment, contracts, patents, current foreign based share holders etc.

Can I merge my Chinese company with my American company to strengthen the American corporation’s asset value? Yes absolutely. This is the most popular technique to show current and future shareholders that your company will be a long term public player. The more asset ’skin’ you are able to put in the game in the beginning the better for the longevity of your enterprise.

How do we sell the stock to the public once we have a symbol and are ready to trade? During your ‘going public’ process you’ll be attached to a market maker. The market maker, your consultant and your publicist (if you don’t have one your consultant will find one for you) will work together at all fronts to help you leverage your new public entity. Your publicist will have authors in newspapers and magazines do write-ups on your company as they help you label yourself globally as a new industry powerhouse, each of your executive team members will also have their own publicity strategies going as well so that your publicist can place them on expert TV and radio panels as industry experts which brings website visitation, new distribution opportunities, personal and corporate branding and investor confidence which is all conducive to an increase in your share price. All of this will bring call volume into your market maker while they are selling your stock to new contacts as well as calling on their established database of investors. The process is typically audited quarterly by your consultant to find dead weight or weaknesses and tighten everything up.

Using the public fundraising strategies based in the US is a wise decision to grow your business. Finding the right consultant is crucial. The right consultant can make or break your efforts to go public in the United States.

Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

If you own or run a company that is trying to raise capital in the current economic conditions you’ve undoubtedly been challenged by the limited funds available. Investors are more difficult to find and the individuals that are actually willing to part with their cash are even tougher to find. You’ve talked to friends, family members, your cpa and your attorney but trying to get them to invest is like drawing blood from a stone, it’s just not happening.

There is an easier way. Most broker dealers and market makers have an emergency number in their rolodex that reads “Investor Finder”, these specialist consultants are brought in when there is nowhere else to turn for cash. A true Investor Finder has 1,000’s of investor contacts that they can call on to get funding for their clients and are constantly using online viral strategies to attract more investors to their database.

An investor finder usually is not a licensed securities broker/agent or attorney; instead they are traditionally consultants that are active in the investment banking facilitation aspect of the industry. Being that they are not licensed they do not accept equity payments or percentages; instead they work on a flat fee basis.

A good consultant in this genre can bring in 30 to 70 real investors per day and it’s up to the client to sell the opportunity from there. A typical lead from an investor finder will be an investor or investment firm that is responding to the consultant’s opportunity introduction email or snail mail mailing, they have read about the opportunity and they respond one of two ways, either they are calling into a phone room to be screened and qualified or they are contacting the client directly.

Many times the investor doesn’t know that they are part of the “finder’s” database but do recall signing up to receive investment opportunity updates, so either way the investor is solid and active. If you are trying to raise capital and need real results quickly and can’t afford to waste time begging for cash, you need to seek out a qualified Investor Finder consultant and make your fundraising efforts fast and easy.

Investor Finder Services, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

Private Placement Memorandums and Direct Public Offerings, the most common mistakes made. When gearing up to raise capital it is typically a business owners first instinct to simply throw together a business plan and find the cheapest company to put together the private placement memorandum and then seek funding. What these professionals don’t realize is that they are doing things in reverse and often times a PPM is not a standalone solution to financial needs.

The first problem is the most companies will first write a business plan and cheap PPM and look for a capital solutions last, when strategically speaking, one should first find a full service solution who has a database of investors ready to fund properly structured corporations with well authored business plans and private placement memos. After you find a company that has a ready network of seasoned investors you will often find that this firm will also structure your business and documents so that you are able to attract the attention of these investors. Next, don’t make the mistake of hiring just anybody to write your biz plan. You need to find a professional author who is well rooted in the art of technical writing and has a solid comprehension of your industry.

Now it’s time to write the PPM. Here is a warning that will most likely go in one ear and out the other but you must never choose the cheapest service for your PPM you will regret it and this is a guarantee. Investors see these documents all day everyday and they know a template when they see it. Don’t believe for a second that you will get a viable private placement memo that will actually achieve funding for anything less than $3,000; it’s just not going to happen. There is too much work involved in putting a fund-able strategy together and you’ll never find an experienced firm to do it for cheap.

The moral of the story is to first find an investor finder solution with a solid network of investors, second have this company write your business plan and private placement memorandum to fit the needs of their investor base and lastly, talk to this consultant about helping you perform a DPO (Direct Public Offering) to their group. This is what separates the men from the boys in the venture capital consulting industry.

Legitimate consultants who stand behind their work will take your PPM directly to their investor base and help you raise capital quickly. In return for this service the company may want a modest equity position in addition to their fee but it is always worth it and typically they will take the final step and have their investors pay to take your company public. This is the ultimate for any company that is seeking a long term funding solution.

Remember the order: 1. Find an investor finder 2. Have that company write your biz plan and PPM 3. Convince the firm to perform a DPO for fast funding 4. Offer some equity to sweeten the pot so that they take you public!

Want To Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Direct Public Offerings and Private Placement Memorandums the easy way!

Going public, the ultimate in the evolution of companies who are seeking access to powerful global finance options for rapid expansion, deepening corporate roots and gaining industry prominence as a true powerhouse and player. The process of going public is technical yet pretty straight forward: business plan, Private Placement Memorandum, Direct Public Offering, Financial Audit, S-1 filing, SEC comments phase, SEC approval, FINRA approval, symbol and then you’re public.

Never price shop for consultants that take companies public and be weary of consultants that will start off a conversation by answering questions geared toward price and giving you quotes without understanding your business first; without the proper information a realistic quote can’t be given anyway.

When you’ve found a consultant that you’re comfortable with you’ll need to get a solid understanding of their full range of services. Of course you’ll want a consulting firm that will handle all of the above for your company but you’ll also need to consider the post IPO services. What happens after you’re public? The reality is, selling off stock in a rapid fashion to raise capital is the last thing you want to do, instead you need to approach your consultant and market maker on how to cross collateralize your securities to raise equity loan capital.

This can be done easily and quickly if you’ve brought on the right group of advisers to expand your company to the global public. When considering the idea of taking your company public it’s important to note that there are many ways to raise capital after you are public without selling off chunks of your company (consult your financial advisers for more information).

Next, when deciding on a consultant they should also have solid investor relationships to assist your company in raising the capital necessary to go public. A true turn-key consultant will have a database of investors seasoned in the process of pre-IPO finance and will often times jump at the chance of investing in the PPM and DPO phase at a discount for companies that are in the process of going public as this almost guarantees that the investor will double or triple their initial investment when the company achieves public status.

Out of the hundreds of consulting firms that offer the ‘take your company public’ service, there are only a dozen or so that actually offer the complete full range of services needed to successfully accomplish public status in a way that maintains investor confidence and corporate longevity. Do your research and find a firm that is well seasoned in the turbulent waters of this industry.

Foreign, Indian and Chinese Companies, Take Your Company Public, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

Regulation D, Under Sections 4(2) and 3(b) of the Securities Act of 1933, the SEC adopted Regulation D to coordinate the various limited offering exemptions and to streamline the existing requirements applicable to private offers and sales of securities. The Regulation establishes three exemptions from registration in Rules 504, 505, and 506.

Rule 504, which provides an exemption for non-reporting companies unless they are “blank check” issuers or certain “shells”, stipulates that: The sale of up to $1,000,000 of securities in a 12-month period is permitted provided that there is no general solicitation, the securities sold are restricted securities and cannot be resold except pursuant to a registration statement or exemption, and a notice must be filed with the SEC within 15 days after the first sale. Rule 504 does not provide an exemption under any state laws. In certain limited circumstances where an offering is conducted under state accredited investor exemptions, securities offered under Rule 504 may be freely transferrable. Unlike Rules 505 and 506, Rule 504 does not mandate that specified disclosure be provided to purchasers. Nonetheless, the business person should take care that sufficient information is provided to meet the full disclosure obligations which exist under the antifraud provisions of the securities laws.

Rule 505 was adopted by the SEC to provide small businesses more flexibility in raising capital than under Rule 504 – but without the uncertainty of determining the quality of the purchasers that generally is involved in using Rule 506. Rule 505 provides issuers a limited offering exemption for sales of securities totaling up to $5 million in any 12-month period.

Rule 505 contains certain restrictions regarding “accredited investors” and non-accredited persons. The-term “accredited investor” includes:

Banks, insurance companies, registered investment companies, business development companies, or small business investment companies; Certain employee benefit plans for which investment decisions are made by a bank, insurance company, or registered investment adviser; Any employee benefit plan (Within the meaning of Title I of the Employee Retirement Income Security Act) with total assets in excess of $5 million; Charitable organizations, corporations or partnerships with assets in excess of $5 million; Directors, executive officers, and general partners of the issuer; Any entity in which all the equity owners are accredited investors; Natural persons with a net worth of at least $1 million; Any natural person with an income in excess of $200,000 in each of the two most recent years or joint income with a spouse in excess of $300,000 for those years and a reasonable expectation of the same income level in the current year; and Trusts with assets of at least $5 million, not formed to acquire the securities offered, and whose purchases are directed by a sophisticated person.

If the issuer sells any securities to non-accredited investors, it must furnish to all investors the same type of information as required by Regulation A. It must also furnish audited financial statements.

If an issuer other than a limited partnership cannot obtain audited financial statements without unreasonable effort or expense, only the issuer’s balance sheet (to be dated within 120 days of the start of the offering) must be audited.

Limited partnerships unable to obtain required financial statements without unreasonable effort or expense may furnish financial statements prepared on the basis of federal income tax requirements and examined and reported on by an independent public or certified accountant in accordance with generally accepted auditing standards; and The issuer must also be available to answer questions by prospective purchasers about the issuer or the offering.

Further restrictions under Rule 505 include:

The total offering price of each issue of securities may not exceed $5 million. The offering may not be made by means of general solicitation or general advertising. The issuer may sell the securities to an unlimited number of “accredited investors” and to 35 non-accredited persons. There are no requirements of “sophistication” or “wealth” for persons to whom the securities are sold. A company must take any necessary steps to ensure that the purchasers are acquiring securities for investment only, not for resale. The securities are thus “restricted” and investors must be informed that they may not be able to sell except pursuant to a registration statement or exemption from registration. The issuer is not required to file any offering materials with the Commission. Fifteen days after the first sale in the offering, the issuer must file a notice of sales on Form D. The notice also contains an undertaking under this Rule for the issuer to furnish the Commission, upon its staff s request, any information given to non-accredited purchasers in connection with the offering. Rule 505 does not provide an exemption from state securities laws.

SEC Rule 506 offers and sales of securities by an issuer that satisfy the conditions stated below are deemed transactions not involving any public offering within the meaning of Section 4(2) of the Securities Act. For an offering to be considered exempt from the registration requirements, Rule 506 stipulates: There is no ceiling on the amount of money which may be raised. No general solicitation or general advertising is permitted. The issuer may sell its securities to an unlimited number of accredited investors and 35 non accredited purchasers. Unlike Rule 505, all non-accredited purchasers (either alone or with a purchaser representative) must be sophisticated – that is, have sufficient knowledge and experience in financial and business matters to render them capable of evaluating the merits and risks of the prospective investment. The term “accredited investor” is defined under Rule 505.

If the issuer sells any securities to non-accredited investors, it must furnish to all investors the same type of information as required by Regulation A. It must also furnish the same financial information as would be required by registration on Form S-1.

If the issuer cannot obtain audited financial statements without unreasonable effort or expense, then financial statements may be provided in accordance with the special treatment described under Rule 505.

The securities sold are “restricted” under the same stipulations in Rule 505.

A company is required to file a notice of the offering on Form D at SEC headquarters within 15 days after the first sale in the offering. All states except New York provide an exemption from state securities laws for offerings under Rule 506 but the company must file a copy of the Form D and pay a filing fee in each state. New York has a distinctive law which makes a Rule 506 offering within that state impractical.

Accredited Investor Exemption

The Small Business Investment Incentive Act of 1980 created a new statutory exemption from registration under the Securities Act for transactions involving offers and sales of securities by any issuer solely to one or more “accredited investors.” Under Section 4(6):

The total offering price of each issue of securities under the exemption may not exceed the limit on small offerings set by Section 3(b) the Securities Act, which currently is $5 million per issue. The offering may not be made by means of any form of advertising or public solicitation.

The term “accredited investor” is defined to include the same individuals and entities as included for purposes of Rules 505 and 506. The issuer is required to file a notice of sales on Form D with the Commission 15 days after the initial sale is made in reliance on the exemption.

Want To Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

Your company is growing. Now you are ready to start raising serious capital and you here the public fund raising markets. Here are the basics of your S-1 filing. Know the lingo before you hire a consultant. Because companies must adhere strictly to SEC regulations, initial prospectuses are similar in their organization. Each S-1 generally consists of the following sections:

Front Section — An S-1 contains a small amount of information not available in a prospectus. In this first section, you can quickly find the issuing company’s phone number and get a vague sense of the future offering price.

Cover/Inside Cover — The prospectus cover outlines the general terms of the offering, including names of the underwriters, number of shares offered, and pricing information. The actual share price is absent from a prospectus until the day of the offering.

Prospectus Summary — Here you will find a brief synopsis of the company’s business and history, a modest discussion of the change in capitalization to occur as a result of the offering, and a useful summary of financial information covering the last five years, if available. If you are screening prospectuses for investment ideas, start here.

Risk Factors — After you have read a few prospectuses, you will become familiar with the “usual suspects” in this section, including “Possible Volatility of Stock,” “Limited History of operations,” “Dilution,” and “Dependence on Key Personnel.” Nevertheless, this section is a worthwhile read to be sure that you understand the challenges facing the company’s management. The discussion of competition can be sobering, but it can also provide a means to compare the value of the issuer against the financial performance and market valuation of its competitors.

Taking your company public should be an exciting and revitalizing time. Don’t take unnecessary risks, hire a consulting firm who can streamline this process and deliver the results you’ll need for success!

Get S-1 Filing InformationWant To Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

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