Navigating The IPO Process: A Comprehensive Guide for Successful Listing

1. The IPO Process

2. Why Do Companies Go Public? • Fund Growth Plans • Currency for M&A • Recap (retire debt) • Liquidity • Employee compensation • Enhanced Image • Landlords • Creditors/Suppliers • Recruiting/Retention

3. Company Preparation • 3 years of audited financial statements • Additions to management • Additions to board of directors • Corporate organization

4. Underwriter’s CriteriaCompany Characteristics • Growth Prospects • Predictability of Results • Management Team • Historical Track Record – Size; Profitability • First Mover Advantage • Sponsorship

5. Underwriter’s CriteriaSector/Market Characteristics • Overall Size • Growth Rate • Competitive Dynamics • Comparable Companies’ Performance • Institutional Appetite

6. Underwriter’s CriteriaIPO Market Conditions • Backlog • Cash Inflows to Mutual Funds • Deals Pricing Below/Within/Above Range • Withdrawn vs. Completed Offerings • Market Performance of Recent IPOs • Stable Economic Climate

7. Selecting Underwriters • Types of Investment Banks • Lead vs. Co-managers • Distribution Capabilities – Institutional, Retail, International • After Market Support • Research • Trading • Ongoing Corporate Finance Support • Chemistry

8. Pitch Book • Executive Summary • Capital Markets Update • Company Positioning • Valuation • Structure and Timing of IPO Process • Track Record of Investment Bank • Team Members…Commitment • References

9. Lead Manager • Orchestrates Drafting, Due Diligence, Syndicate, Sales, After Market • Negotiates Fee Split • Allocates Shares • Leads Pricing Call • 15% Over Allotment Option “Greenshoe”, “Shoe” • Co-Lead Managers

10. Fee Structure • Gross Spread - 7% • Management Fee • Underwriting Fee • Selling Consession • Jump Ball • Fixed Fee

11. Organizational Meeting • “All hands meeting” • Participants • Company • Company Counsel • Underwriters (two or more) • Underwriter’s Counsel • Company’s Accountants

12. Organizational Meeting • Transaction Issues • Due Diligence Interviews • Document Request List • Facility and/or Store Tours • Initial Drafting • Outline Story • Position the Company • Schedule of Key Dates

13. Transactional Issues • Size of Offering • Not More Than a Third • Company vs Secondary Shares • Over Allotment Option • Split • Lock-ups – Who and How Long • Use of Proceeds • Debt Retirement • Working Capital • Growth • Legal • Corporate Status • Quiet Period and Ordinary Course Announcements • Anti-Takeover Provisions • Misc • Comfort Letter • Selection of Printer • Transfer Agent • Bank Note Company • Reservation of Stock Symbol • Authorized Shares • S-8 for the Employees Option Plan • Directed Stock

14. Prospectus “Selling Document” • Five to Eight Drafting Sessions • File Registration Statement with SEC • SEC Review (used to be 30 days) • SEC Comments • File Amendment 1 with SEC • Print and Distribute “Red Herring”

15. Prospectus • Cover • Summary • The Compnay • Risk Factors • Use of Proceeds • Dividend Policy • Capitalization • Dilution • Selected Financial Data • MD&A • The Business • Management and Security Holders • Description of Securities

16. Registration Statement • Prospectus • Exhibits • Underwriting Agreement • Articles of Incorporation • Opinion of Company Counsel • Stock Option Plan(s); 401(k) Plan • Employment Agreements • Registration Rights Agreements • Material Contracts • Computation of Earnings per Share • Consents

17. Marketing Process • Marketing Documents • Prospectus • Roadshow Presentation • Insitutional Sales Teach In • Retail Broker Fact Sheet • Distribution Strategy • Mix of Institutional and Retail • Directed Shares • Syndicate Structure • Roadshow • Share Allocation

18. Marketing Strategy • Institutions with history of buying, holding and increasing positions • Institutions which own comparable companies • Build momentum before NY and Boston • Create perception of scarcity

19. The Road Show • Two to Three Weeks • Organized and paid for by underwriter • Provides info about the company in one-on-one meetings with prospective investors • Build the book

20. Going Effective • Acceleration Request • Pricing the Offering • Final Prospectus Printed

21. After Market Support • Timely, Accurate and Insightful Research • Coverage begins after a 25 day quiet period • Follow up Road Shows • Investor Conferences • Active Market Making

22. Life As a Public Company • Reporting • Qs, Ks, Press Releases, Conference Calls, Reg FD, Forward-looking Statements, Sarbanes-Oxley • Trading Blackouts • Proxys • BOD Liability • Investor Relations • Secondary Offerings • Additional Cash • Enhance the Float • Orderly Exit for Large Holders