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White Paper - Asparagus Co Going Public

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Asparagus Corporation, one of the world's premier hotel companies, operates hotels and resorts worldwide. It offers over 300 hotels and resorts.

Public ownership can provide significant benefits to the company and its shareholders, but it has many disadvantages, too.

Going public will provide both tangible and intangible benefits, including the following:

Increased capital

Access to capital will increase because publicly traded stock is more attractive due to liquidity. IPO will provide the company with additional funds to meet working capital needs, expand research and development efforts, invest in facilities and equipment.

Improved financial position

Asparagus Corp. will experience an immediate improvement in the balance sheet and debt-to-equity ratio.

Enhanced ability to raise equity

If our stock performs well in the stock market, additional stock might be sold on favorable terms, which can provide additional funding for the future growth.

Liquidity and valuation

Venture capital firms, require liquidity in a company. Venture capital firms generally organize funds with an expected life of less than ten years. At the end of that period, they need to liquidate the fund. By going public, we provide the venture capitalists with the ability to sell their holdings or to distribute publicly tradable stock to their fund participants.

Improved credibility with business partners

Going public will provide business partners such as suppliers, distributors, and customers with more information. Prospective suppliers and customers thus will feel more secure about entering into a relationship with the company.

Personal wealth

IPO will enhance company’s net worth. Gain by selling a portion of existing stock during the IPO won’t be realized immediate, but publicly traded stock can be used as collateral to secure borrowings of a personal nature. Shares of publicly traded stock are more liquid and as such will facilitate personal financial and estate planning.

There are also some very significant disadvantages of going public that should be weighed against the many advantages.

Short-term growth pressure

Another disadvantage of going public is the internal and external pressures publicly held company management may feel to maintain earnings and growth patterns. These pressures are generally tied to the quarterly reports filed with the SEC and delivered to shareholders. Because shareholders will, therefore, evaluate company progress quarterly rather than annually, management will be tempted to make short-term decisions at the expense of long-term profitability. In their efforts to anticipate the stock market and satisfy outside shareholders, management may begin to lose the operating flexibility it exercised before going public.

Disclosure of information

As a publicly held corporation, the company’s operations and financial situation will be open to public. Information such as details regarding stock option plans, discussion of significant contracts such as lease and consulting agreements, as well as such information about the business operation as sales, cost of sales, gross profits, net income, borrowings and plans for the future will be available to competitors, customers, employees, and others. Such information will be of significant interest to competitors. Furthermore, this disclosure and reporting responsibility does not end after the IPO period.

Less control

The sale of shares to the public will dilute your ownership and reduce your level of control of the company. In addition, you will be required to have a Board of Directors consisting of a majority of independent directors. Additionally the possibility for a hostile takeover increases.

Greater legal exposure

As a consequence of selling your company’s shares to the public, there will be greater legal exposure to the officers and directors of the company.

Expense

The cost of going public is substantial, both initially and on an ongoing basis. As for the initial costs, the underwriters’ commission can run as high as ten percent (although

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