FEND Securities Expert Witness - Initial Public Offering Scorecard

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INITIAL PUBLIC OFFERING (IPO) SCORECARD

Name of Offering Names of Officers:

Description:

The following information is only intended for review by representatives of Broker Dealers and is not authorized for distribution to the public

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1. Company/Officers: ____
Experience : # of yrs. in bus.

a. More than 10 yrs.(5 pts)
b. 8 - 10 years           (4 pts)
c. 6 - 7 years             (3 pts)
d. 4 - 5 years             (2 pts)
e. 1 - 3 years              (1 pts)

2. Net Worth Consideration: ____
(Prior to IPO) ( Neg. D/W ratio - 1 pt.)

a. $5,000,000+                   (5 pts)
b. $2,500,000-$4,999,999 (4 pts)
c. $1,000,000-$2,499,999 (3 pts)
d. $500,000 - $999,999     (2 pts)
e. $Negative net worth   (1 pts)

3. Financial Track Record/Litig. ____
(Hist. of operating losses/Def. Wk. Cap.)

a. Oper. gains from incept. (5 pts)
b. Oper. gains-most rec. yr (4 pts)
c. Break-even - curr. yr. (3 pts)
d. Oper. losses - curr. yrs (2 pts)
e. Oper. losses from incep (1 pts)

4. Load Factors :($5-10MM offer.) ____

a. Less than 10% (5 pts)
b. 10% - 11%        (4 pts)
c. 12% - 13%        (3 prs)
d. 14% - 19%        (2 pts)
e. 20% or more     (1 pts)

5. Liquidity (inc. guar.) ____

a. Fully liq. NYSE hist (5 pts)
b. App. NYSE/ASE (4 pts)
c. App. NASDAQ list (3 pts)
d. Listing app. pend. (2 pts)
e. Illiq. not to be trade (1 pts)

6. Self Dealing/Conflicts: ____

a. All "arms length" (5 pts)
b. Pay self - 1 area     (4 pts)
c. Pay self - 2 areas   (3 pts)
d. Pay self - 3 areas   (2 pts)
e. Pay self in 4+areas(1 prs)

7. Dilution: _____

a. Less than 25% (5 pts)
b. 25% - 50%         (4 pts)
c. 50% - 65%         ( 3 pts)
d. 65% - 75%         (2 pts)
e. More than 75% (1 pts)

8. Percentage of Supply/Demand:____

a. 90%
b. 95%
c. 100%
d. 110%
e. 120%

9. Assumptions:_____

a. Very conservative criteria & safeguards                       (5 pts)
b. Semi-conservative criteria with many safeguards       (4 pts)
c. Semi-aggressive criteria with some safeguards           (3 pts)
d. Aggressive criteria with few safeguards                       (2 pts)
e. Aggressive criteria with virtually no safe-guards        (1 pts)

10. Risk Factors:
(% of Normal Risk)

a. 80% (5 pts)
b. 90% (4 pts)
c. 100% (3 pts)
d. 110% (2 pts)
e. 120% (1 pts)

TOTAL POINTS _____

Note: A minimum of 35 points (70%) is required for
due diligence consideration. Further, a score
of one (1) in any one category may cause the
offering (IPO) to be rejected.

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SCORECARDS

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Reproduction, photocopying or incorporation into any information retrieval system for external or internal use is prohibited unless permission is obtained from the publisher, Financial Education Network Development (FEND).

FEND - Securities Expert Witness
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