• Raise capital overseas.
• Build market awareness and shareholder value.
• Avoid the burden of U.S. regulation.
• Get more value out of existing foreign listings.
• Gain easy, inexpensive access to European investors.
• List on a liquid, energy-oriented exchange and raise capital there.
• For Non-U.S. Institutional Investors Only

CEO’s of small-cap publicly-traded companies ask: “Show me an alternative that offers me a liquid market for my stock combined with the potential of raising additional capital - free from expensive, tiresome U.S. over-regulation?”

A rising number of small-cap U.S. companies have listed their stock each year on stock markets outside of the United States. There is nothing “un-American” about raising capital and listing your company’s stock on an exchange outside of the United States. Large cap companies are avoiding U.S. registrations of IPOs, as well.

The December 2, 2006, Wall Street Journal reported: “Of the 20 global IPOs that raised the most capital last year, just one was listed in the U.S. while the rest went through financial centers in London, Hong Kong and elsewhere, according to data-provider Dealogic.” That’s a sharp turnabout from five years ago, when 60% were listed in the U.S. Some of this trend reflects a natural maturing of financial markets overseas. But those on Wall Street worry that it may also reflect increasing costs in the U.S. associated with litigation and the new corporate-governance regulations.”

The Wall Street Journal goes on to point out that “high costs of doing business and stringent post-Enron regulations that cost companies millions of dollars every year” are the reasons given that the U.S. accounted for only 28% of all new equity raised last year down from 41% in 1995. “Settlements of class-action lawsuits, which are nearly nonexistent in other countries, cost $3.5 billion last year, up from $150 million in 1995”.

Many CEOs of publicly-traded companies have discovered that small-cap companies that wish to add liquidity and market following for their stock can become registered in one European countries, “passported” in the other EU countries, listed on one or more of the liquid stock exchanges of Europe, and raise the additional capital they need through a secondary public offering. Listing and raising capital in Europe is a much shorter process and far less expensive than in the U.S. due to more relaxed regulatory requirements.

How about AIM in London? So far, the Alternative Investment Market of the London Stock Exchange (AIM) has become a listing haven for up-and-coming U.S. companies in initial public offerings. The Wall Street Journal reported in its December 20, 2006 edition that “This year AIM has more new entrants than the New York Stock Exchange and Nasdaq combined, according to Dealogic”. AIM has exploded in popularity in 2006. More than 200 companies have raised more than $17 billion this year. But many U.S. companies have raised funds on AIM only to find their stock languishing there without sponsorship or liquidity . . . . certainly no improvement to the poor liquidity in the OTC and some exchange markets for small cap companies in the U.S.

December 22, 2006, The New York Times carried the forecast that “there will be a growing propensity in the venture capital industry to take American companies public in overseas markets in 2007. The chief reason for this interest: “The United States markets have not exactly been friendly places of late for venture capitalists to re-sell their interests in start-ups.”