Investor Communications: Investor Relations:
Shareholder Communications
Client
Nasdaq Listing Shareholder Letter
Dear Shareholders,
On October 6, 2005 we announced that we moved the trading
of our stock from the OTCBB to the Nasdaq National Market
under the symbol XXXX, and that we were offering 1.1 million
shares of common stock to the public. I would like to take
this opportunity to explain why we took these steps and answer
some common questions regarding how this affects the trading
of your shares of stock.
First of all, the move to Nasdaq should be seamless for
shareholders and requires no action on your part.
Attached is a Q&A where you can find answers to questions
regarding the trading of your shares on Nasdaq.
Thanks to the outstanding growth we have achieved during
the past several years, we reached the point where listing
on a national stock market made good business sense for our
company and our shareholders. In effect, we outgrew the OTCBB,
which limited the potential for investment in our company.
Nasdaq gives us more exposure and higher visibility in the
financial community. It also provides greater liquidity and
improved pricing efficiencies. All of this means that investors
now have better access to more of our stock, which they can
buy and sell more quickly and easily.
Furthermore, having more of our shares available for trading
will attract larger institutional shareholders that typically
buy many thousands of shares of stock at a time. Previously,
there weren’t enough shares readily available for such investors
to buy our stock.
The ability to sell more of our stock gives us greater access
to the capital markets to expand our business. With the money
we are raising through our public share offering, we will
be able to build more branch locations, hire more employees,
offer more products and services, and ultimately provide
more value for our shareholders.
This is an important milestone for (Client). It represents
the tremendous growth and achievements of a company that
10 years ago only had 15 full-time staff members and $5.6
million in assets. Despite our new stature as a publicly
traded company, I want to clearly state that we will remain
true to our bedrock values: building personal relationships
with our customers and serving the communities in which we
do business.
We are extremely grateful for your continued support, the
dedication of our employees and the loyalty of our customers.
Rest assured, we remain committed to the continued growth
and development of (Client) and the delivery of value to
you, our shareholders.
Sincerely,
(Client)
Chief Executive Officer
(Client)
Shareholder Q&A: Trading on Nasdaq
As a shareholder, what do I have to do?
It’s simple – you do NOT have to do a thing. If you hold
an actual stock certificate, you do not need to replace
it. The change will occur automatically when you sell your
securities. If you want to sell shares, contact your broker
or the transfer agent (see below). The transfer agent will
recognize your certificates as (Client) stock traded on
Nasdaq. If you want to buy shares, you can use a broker
or an online trading service with which you have an account.
Just tell them you want to buy shares of the ticker symbol
XXXX.
Who is the transfer agent for (Client)?
Registrar and Transfer
10 Commerce Drive
Cranford, NJ 07016-3527
(800) 368-5948
www.rtco.com
How does Nasdaq differ from the OTC Bulletin Board?
Nasdaq is the largest electronic stock market in the U.S.
It uses a sophisticated electronic network to make instantaneous
trades among millions of investors. The OTC Bulletin Board
(OTCBB) is an auction market where trades are conducted
manually, mostly via telephone. Because the OTCBB does
not have an automated trading system it can take a long
time between placing a market order and getting an execution,
during which time the price of a stock could go up or down
significantly. If this happens, an investor's order may
be filled at a price much different than they expected.
Also, Nasdaq has rigorous listing standards for the companies
on its exchange to ensure a minimum level of quality. There
are no such requirements on the OTCBB. Because of this, companies
traded on Nasdaq are viewed as more legitimate than companies
on the OTCBB. Stocks on the OTCBB are viewed as more risky.
What is liquidity and price efficiency?
Liquidity in the investing world means the ease with which
a stock can be bought or sold in the market without affecting
its price. If you own a stock with low liquidity, there
is the possibility that you won’t be able to sell the stock
because you cannot find a buyer, or you may be required
to lower your asking price until it becomes attractive
enough to another buyer (which is price inefficient).
Having more liquidity – more shares available to more investors
– increases the likelihood that stocks will trade quickly
at a fair price (price efficient).
What should I do if I have additional questions?
If you have additional questions about Nasdaq, please visit
its website, www.nasdaq.com. If you have additional questions
about your (Client) stock, please contact us by email (Client
email address) or by phone at (XXX) XXX-XXXX.
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