London Stock Exchange AIM Listing

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Evaluation of a common stock offering process on AIM of the London Stock Exchange

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London Stock Exchange AIM Listing

  1. 1. <ul><ul><li>DICKSON CONSULTING </li></ul></ul><ul><ul><li>********* </li></ul></ul><ul><li>Listing on London Stock Exchange </li></ul><ul><li>AIM Market </li></ul>
  2. 2. Table Of Contents <ul><li>Overview of AIM </li></ul><ul><li>Factors in Accessing Company Suitability </li></ul><ul><li>Pros and Cons of AIM </li></ul><ul><li>Examples of Benefits </li></ul><ul><li>Examples of Risks </li></ul><ul><li>Examples of Key Issues </li></ul><ul><li>Targeted Shareholders </li></ul><ul><li>Sample Timetable </li></ul><ul><li>Professional Advisors </li></ul><ul><li>Role of Nomad </li></ul><ul><li>Role of Broker </li></ul><ul><li>AIM vs. NASDAQ </li></ul>
  3. 3. Overview of AIM <ul><li>“ Small company” stock exchange portion of London Stock Exchange </li></ul><ul><li>Platform for higher risk investments </li></ul><ul><li>Since 1995 2,200 AIM companies have used AIM to go public </li></ul><ul><li>Total market value of $71.6 billion-pounds </li></ul><ul><li>Largest market cap company-$1.6 billion- pounds </li></ul><ul><li>Number of companies in market value range of $100 to $250 million pounds-131 </li></ul><ul><li>Since 1995, 250 international companies </li></ul>
  4. 4. Factors in Assessing Company Suitability <ul><li>Management team </li></ul><ul><ul><li>Capability </li></ul></ul><ul><ul><li>Integrity </li></ul></ul><ul><li>Viable business model </li></ul><ul><ul><li>Growth </li></ul></ul><ul><ul><li>Deliver value to shareholders </li></ul></ul><ul><li>Valuation acceptable to all parties </li></ul><ul><li>The expectation is that at least $10 million (USD) will be raised, with market cap of $20 million minimum. </li></ul><ul><li>Corporate governance </li></ul>
  5. 5. Pros and Cons of AIM <ul><li>Pros of AIM </li></ul><ul><li>Less regulatory structure compared to U.S. </li></ul><ul><li>Fewer rules and costs </li></ul><ul><li>Access to capital </li></ul><ul><li>Market value of company more readily established </li></ul><ul><li>New investors </li></ul><ul><li>Market for stock </li></ul><ul><li>Public profile </li></ul><ul><li>Cons Of AIM </li></ul><ul><li>Key decision of officers and board members have increased visibility </li></ul><ul><li>Uncertainty of market conditions and other factors could impact share price </li></ul><ul><li>Communication with investors (roadshow) </li></ul>
  6. 6. Examples of Benefits <ul><li>Additional cash for more rapid growth </li></ul><ul><li>Exit strategy for existing shareholders </li></ul><ul><li>Publicly traded market </li></ul><ul><li>Increased visibility/communication </li></ul><ul><li>Entry or Reentry into European market with product </li></ul><ul><li>Employee morale resulting from benefits of share ownership </li></ul>
  7. 7. Examples of Risks <ul><li>Product not viewed as unique/competitive </li></ul><ul><li>Small company viewed as one product company </li></ul><ul><li>Product development not far enough along </li></ul><ul><li>Infrastructure not adequate for public company </li></ul><ul><li>Expense of being a public company </li></ul><ul><li>Time required </li></ul>
  8. 8. Examples of Key Issues <ul><li>Is this the most appropriate strategic alternative? </li></ul><ul><li>Existing shareholders sale at time of IPO? </li></ul><ul><li>Reaction to dilution? </li></ul><ul><li>Market price at time of initial offering? </li></ul><ul><li>Market price after initial offering? </li></ul><ul><li>Infrastructure to support public company? </li></ul><ul><li>Time required for CEO/CFO? </li></ul>
  9. 9. Targeted Shareholders <ul><li>Venture capital trusts listed on the LSE </li></ul><ul><li>Firms that specialize in investing in AIM market </li></ul><ul><li>High net worth individuals/retail investors </li></ul><ul><li>Larger financial institutions. Examples: </li></ul><ul><ul><li>Merrill Lynch </li></ul></ul><ul><ul><li>Fidelity </li></ul></ul><ul><ul><li>Goldman Sachs </li></ul></ul>
  10. 10. Sample Timetable <ul><li>LSE course on AIM market </li></ul><ul><li>Appoint advisors </li></ul><ul><li>Draft prospectus </li></ul><ul><li>IR strategy </li></ul><ul><li>PR presentation </li></ul><ul><li>Complete due diligence </li></ul><ul><li>Analyst presentations </li></ul><ul><li>Complete financials </li></ul><ul><li>Marketing </li></ul><ul><li>Book closes </li></ul><ul><li>Impact day </li></ul><ul><li>Placing completion* </li></ul><ul><li>Trading commences </li></ul><ul><li>Certificates issued </li></ul><ul><li>*Complete documents, pricing and allocation, </li></ul><ul><li>register prospectus, sign subscription </li></ul><ul><li>agreement, print final prospectus </li></ul><ul><li>9/19 or 10/10 </li></ul><ul><li>December 1 </li></ul><ul><li>January 1 </li></ul><ul><li>January 1 </li></ul><ul><li>February 1 </li></ul><ul><li>February 1 </li></ul><ul><li>February 2-March 15 </li></ul><ul><li>February 28 </li></ul><ul><li>March 19- March 28 </li></ul><ul><li>April 2 </li></ul><ul><li>April 3 </li></ul><ul><li>April 7 </li></ul><ul><li>April 9 </li></ul><ul><li>April 16 </li></ul><ul><li>Front end of process=Selling </li></ul><ul><li>Backend of process=Legal </li></ul>
  11. 11. Professional Advisors <ul><li>Accounting firm </li></ul><ul><li>Law firm </li></ul><ul><li>Nominated Advisor (“Nomad”) </li></ul><ul><li>Broker (may be same firm as Nomad) </li></ul><ul><li>Public/investor relations </li></ul>
  12. 12. Role of Nominated Advisor (“Nomad”) <ul><li>Access whether company is appropriate for market </li></ul><ul><li>Explain the AIM rules to company’s board and ensure that the directors are aware of their responsibilities and obligations </li></ul><ul><li>Project management of the process </li></ul><ul><li>Help pull together admission documents </li></ul><ul><li>Provide ongoing advice and guidance on the AIM rules once company has been admitted </li></ul>
  13. 13. Role of Broker <ul><li>Gauging interest and advising on pricing </li></ul><ul><li>Bringing buyers and sellers of company’s shares together (marketing and book building) </li></ul><ul><li>Preparing and accompanying company on the roadshow </li></ul><ul><li>Trading in the secondary market </li></ul><ul><li>Provide research </li></ul>
  14. 14. AIM vs. NASDAQ <ul><li> Favor NASDAQ </li></ul><ul><li>U.S. based market </li></ul><ul><li>Communications easier with U.S. shareholders </li></ul><ul><li>Average capitalization </li></ul><ul><li>$1.2 billion </li></ul><ul><li> Favor AIM </li></ul><ul><li>U.S. regulatory requirements (Sarbanes-Oxley) </li></ul><ul><li>No minimum stock price (NASDAQ delisting if below $1 per share) </li></ul><ul><li>Legal scrutiny over communications </li></ul><ul><li>Average capitalization $70 million </li></ul>
  15. 15. Services of Dickson Consulting <ul><li>Board of directors/advisory board representation </li></ul><ul><ul><li>Designated financial expert </li></ul></ul><ul><li>Senior executive services </li></ul><ul><li>Strategic planning facilitation </li></ul><ul><li>Financing assistance </li></ul><ul><li>Business valuations </li></ul><ul><li>Exit strategy and M&A assistance </li></ul><ul><li>Investor relations strategies </li></ul>
  16. 16. Disclaimers <ul><li>This presentation is not intended to provide investment advice or any other advice on any company mentioned. </li></ul><ul><li>The information in this presentation is believed to be correct but no assurances are provided that the information is correct. </li></ul><ul><li>Events may have occurred that are significant that are not mentioned in this presentation. </li></ul>

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