PRIMARY CAPITAL, LLCMEMBER FINRA, SIPC90 BROAD STREET, SUITE 905, NEW YORK, NY 10004T (212) 600-0030 F (212) 400-4234 INVESTMENT BANKING, FINANCIAL SERVICESWWW.PRIMARYLLC.COM

SCOTT LOPEZ – MANAGING DIRECTORSERIES 63, 82915-433-7655SLOPEZ@PRIMARYLLC.COM

What Does An Investment Banker Do?

Capital Raising Investment banks assist their clients to raise money through stock

(equity) or bond (debt) offerings. The proceeds can be used for expansion, new investments, working capital or repay debts.

Advisory Investment banks advise their clients on certain strategic moves such

as buying or selling a business, and restructuring business lines to improve profitability. In many cases the strategic move (e.g. acquisition) requires concurrent capital raising exercise described above.

Must be Registered with FINRA, the SEC and the State A Match Maker!

Investor Mindset

Remember, they’re trying to eliminate YOU …But need deals too!!

First and foremost, how much are you raising?

What’s the valuation of the company?

What are you willing to give up in terms of equity or control?

Investor Mindset

Who Is Management?

What’s Your Financial Model? What Are the Revenue Streams? Do you have a well thought out business model? Business plan?

What Milestones Have You Achieved? Is there MOMENTUM??

How Much Have You Raised and What Have You Done With It?

Pricing a New Offering - Series 79

The current direction of the market overall

The trends of the underlying sector

The financial well-being of the company, both on its own merits as well in comparison to its competitors

Annual and quarterly reports made publicly available to the company

Financial statements and proxies required by regulatory organizations

• Up-listing to NYSE MKT (S-1)• Public Offering

2010

2011

2013

2014

2015

• An idea

• Incorporation

• Seed Funding

• Reverse Merger (RTO)• Series A Preferred

Pathway to Uplistng on the NYSE

An IdeaSolve a problem that matters – Unlimited!

Multi-billion market opportunity Identify big unmeet need Technical breakthrough Establish your core competence Get others excited

Pick your partners wisely

Founder roles Key initial employees Sweat equity commitment

IncorporationC Corporation Find a good, low cost attorney Incorporate in Delaware (Preferred) Choose the correct capitalization structure Identify the right ownership between founders & option pool

Founders’ agreements Founder employment agreements, vesting terms Invention / IP and confidentiality protection Consulting agreements tied to stock options for key employees Establish compensation metrics early IRS reporting

Seed FundingConvertible notes

Need the 1st check from a qualified independent investor Leverage personal local network for finder’s program Sell near term liquidity value proposition from an OTC listing Receive free trading shares with Reverse Merger (RTO) Discount on Series A Preferred TBD

Reverse Merger (RTO)OTC public company listing

Identify a clean, non-operating shell Shell filed S-1 and Form 10 registration over 1 year prior Shell held to high standards of governance Appropriate share capital structure Leave no shares behind with the shell owners Change name, symbol, incorporation & re-capitalize

SEC Reporting

First SEC reporting documents Super 8-K & Form 10-K Establish external reporting capability Choose qualified auditors for SEC reporting Strong Controller required

Series AObtain a lead investor

Preferred shareholder rights with warrants at 2X price Commitment to uplist when able to meet requirements Interest earned until uplist in form of additional shares Finder’s fee to leverage network of qualified investors Rolling closes to fund operations, 8-K filings

Ensure sufficient funds to pursue uplist strategy Raise enough cash to meet the uplist date Build out the board of directors (BOD), hire CFO Select governance committees Choose qualified external lawyers for uplist run

Uplisting to NYSE MKT (S-1)NYSE MKT: Public up-listing requirements

Stock price: minimum $2.00 per share Market Capitalization: minimum $50 million Shareholders: minimum 400 Shareholder Equity: minimum $4 million S1 registration statement, public offering

Banker-led public offering Select institutional lead bank, retail coverage co-managers Conduct a non-deal roadshow prior to S-1 filing Analyst coverage is a must from lead bank 180 –day lock-up is essential Raise minimum 1 year capital needs Allow minimum 4-6 months for the uplist process

S-3 (Shelf Registration)Requirements for continued capital raises Minimum 1 year public company history to meet early

qualification

Reporting compliance while public OTC listed company on filing history

Consider ATM option with “shelf,” direct private placement, or banker-lead PIPE

3 year credit line for additional capital needs

Goal to reach >$75M market cap to avoid capital raising limitations

Follow-on Offering

The “Real” IPO

Attract next tier investment banking firms Focus on increasing institutional shareholder distribution Target marquee funds Increase research analyst coverage Increase public float

Series “C” round of common stock, no warrants Small cap valuation > $5 per share Raise enough cash for 2 year capital needs Timed with important press releases and milestones Significant ROI for investors

Follow-on offering

Expansion and GrowthBuild company for the long-term Consider M&A expansion plans Select a good IR firm to build company awareness Seek major partner arrangements Achieve required business milestones Build out key functional areas and infrastructure

• Access to public markets for capital• Possibility to raise capital at higher valuations • Retainage of founder control • Enhance company’s image• Attract and retain talented employees• Liquidity to founders, venture capital investors and employees • Ability to acquire other businesses with stock and cash

Benefits

Challenges• SEC regulatory compliance• Pressure of performance• Restriction on insider sales• Investor relations as well as analysts engagement • Vulnerability to hostile takeovers • Volatility and fluctuation of public company price and valuation• Litigation risk

Why Go IPO

Lessons LearnedThings to remember• “Sweat equity” – Your time and money is valuable• “Skin in the game” – Take care of your employees• Be careful who you take money from• Just as hard to raise $50K as $500K• Don’t give up control of the company you built• Stay focused, don’t panic• Don’t cut corners• Remember the long term vision• Good execution, good things will happen• Success is the ultimate goal