1. What Is an Initial Public Offering?

An Initial Public Offering refers to a company's first distribution of its stock to the investing public. Companies "go public" generally to raise capital so that the company may implement its growth strategies. Initial public offerings may include newly issued shares sold by the issuing company and/or shares sold by existing shareholders of the issuing company. The shares offered in an Initial Public Offering are priced by negotiation between the underwriters and the issuing company or selling shareholders, as the case may be, and may not reflect the fair market value of the shares.

2. What is a Secondary Offering?

A Secondary Offering refers to the distribution of stock by a company that already has publicly traded securities. Secondary offerings may include newly issued shares sold by the issuing company and/or shares sold by existing shareholders of the issuing company. The shares offered in a secondary offering are priced by negotiation between the underwriters and the issuing company or selling shareholders, as the case may be. Typically these offerings are priced in close proximity to the last sale price of the security in its principle trading market prior to the pricing terms of the offering being set.

3. What is the Role of the Underwriters?

When a company decides to make a public offering, it usually hires an investment bank to underwrite the offering. Underwriters play a very critical role. First they provide the issuing company with financial advice, and then they buy the shares directly from the company or selling shareholders and resell them to the public. The underwriters are paid for their services from the underwriting spread, or concession, which is the difference between the price paid by the underwriter to the issuer or selling shareholders and the price the underwriter sells the shares to the public. In order to minimize its financial risk, the underwriter may bring in other investment banks and form an underwriting syndicate. The syndicate will, in turn, bring in broker/dealers to form a selling group. The selling group will take indications of interest from potential buyers and distribute the shares. In return, the selling group receives a per share compensation for its efforts.

4. What does the Securities and Exchange Commission Do?

Before offering securities in a public offering, the issuer must file a registration statement with the Securities and Exchange Commission. The registration statement includes a preliminary prospectus that contains detailed information about the issuing company's business, officers and directors, principal stockholders and historical financial and operating information about the company. The SEC will neither approve nor disapprove an offering nor guarantee the accuracy of the disclosures contained in the preliminary prospectus. The SEC reviews the prospectus to ensure that it conforms to the legal requirements contained in its rules. When it completes its review, the SEC declares the offering effective. The underwriters and the issuing company and/or selling shareholders can then agree on an offering price and commence the offering. Once the underwriting syndicate has distributed the shares, they generally begin trading in the secondary market or after market on the NASDAQ National Market System or one of the national exchanges.

5. What do I need to do in order to purchase shares in a public offering at E InvestmentBank?

Before participating in a public offering offered by Wedbush, a potential investor must first open an account with Wedbush. As part of the account opening application, you will be requested to complete a customer profile. Your eligibility to participate in public offerings will be based upon the information included in your customer profile regarding your investment objectives, financial background and possible affiliations with the issuing company or with a brokerage or banking institution.

6. What are a Preliminary Prospectus and a final Prospectus and how do I get one?

The preliminary prospectus is a document that tells potential purchasers about the securities being offered by the issuer. It includes information about the offering, risks attendant to the offering, and the issuing company's business, directors and officers, principal stockholders, and historical financial and operating history. Before you may place an indication of interest you must first view the preliminary prospectus and acknowledge that you have read it. The preliminary prospectus is available at the website. You may review it on-line, download it or print a copy of it. Once a public offering is effective and priced the final prospectus will be posted at the site as soon as it is available.

7. What does it mean to place an indication of interest as a "limit order" or "at the offering price?"

You may place an indication of interest as a limit order (which means that you are willing to purchase the securities at up to a particular price) or at the offering price (which means that you are willing to purchase securities at the price at which the issue is made regardless of price). When you place an indication of interest as a limit order, you set the maximum price you are willing to pay to buy a stock. If the offering is priced at or below the maximum you have set, you will be eligible to be allocated shares in the offering. If the offering is priced above the price you have set, you will not be allocated shares in the offering. When you place an indication of interest "at the offering price," you will be eligible to be allocated shares in the offering at the price at which the new issue is offered in the offering. This price may be higher or lower than the estimated price range (in the case of an initial public offering) or the trading price at the time you placed the indication of interest.

8. Can I Change Or Cancel My Indication of Interest?

Yes, you can change your indication of interest at any time before the offering prices. After the deal prices you will have a set period of time to change or cancel your indication. If you do not reconfirm before the deadline, you will not receive shares. To change your indication of interest, go to the My Account area on the web site. From here you can choose to cancel an open order by clicking on the cancel current order button or can change the number of shares you are interested in by reentering your order and approving it.

9. Can I Cancel Or Change an Indication of Interest after it becomes a Firm Order?

No. Once your reconfirmation is received and your order is converted into a firm order it is regarded as a final buy order and cannot be changed or cancelled.

10. When Will The Offering Be Priced, So I Can Have Enough Funds Available?

We will post the expected offering dates on our site based upon the most current information available. However, please be aware that these dates are estimates and can in no way be guaranteed. We will make our best efforts to keep all customers up-to-date on all pricing developments.

11. Will The Offering Definitely Be Priced Within The Estimated Offering Range?

The estimated pricing range posted is based on the information provided in the preliminary prospectus. This is subject to change and the issue may be offered above or below this range. For this reason, interested customers can place their indications subject as a "limit order" or "at the offering price." A limit order will only be converted to firm orders if the public offering price is at or below the limit indicated. An indication of interest at the offering price will be converted to firm orders regardless of the public offering price.

12. Will I Be Able To Purchase All Of The Shares For Which I Place and Indication of Interest?

We cannot guarantee that there will be a sufficient number of shares available to allow us to fulfill all indications of interest placed by our customers. If the indications of interest placed by our customers exceed the supply that we have available to distribute, then we will allocate the shares we have available among those qualified investors who have placed indications of interest and have sufficient cash in their accounts to effect a purchase.