OVERVIEW ON REG S SHARES

Regulation S was established by the U.S. Securities and Exchange Commission ("SEC") in 1990 and was substantially amended in 1997. It was created to facilitate investment in U.S. public companies by non- U.S. Investors.

Why do Non-U.S. and U.S. Qualifying Investors buy Reg-S stock? (A U.S. Qualifying Investor is a US National living outside America; such as an Expatriate)

1. Discounted Purchase Price. Investors typically buy Reg-S securities of U.S. companies at a slight discount from the primary U.S. public market. This discount compensates the buyer for the risks associated with the mandatory one-year restriction from resale of the stock to U.S. investors or through U.S. securities markets (known as the "Distribution Compliance Period"). Issuers will also discount Reg- S stock because they have saved the registration costs and do not have the time delays associated with a US offering and SEC registration. Furthermore, a pure equity investment with a one-year holding period is a more attractive method of raising funds than almost any other financing strategy that is available to an emerging company.

2. Tax advantages. Capital gains tax rates in non-U.S. countries typically encourage a holding period of a minimum of one year by taxing short-term (less than one-year) gains at prohibitively high rates. Therefore, the one-year 'Distribution Compliance Period' before the stock may be sold in the U.S. marketplace is not a negative factor for the non-U.S. investor.
3. U.S. Investment. The availability of Reg-S stock issues gives the non-U.S. investor greater choices in their purchase of stock issues in U.S. public companies.

Why do Companies issue stock via Regulation S filings?

1. Raising new capital. The ability to access new foreign capital markets and investors are the main reasons that U.S. issuers seek to raise funds under Regulation S.

2. Advertising of Offering. Issuers are allowed to advertise a Regulation S stock offering outside of the U.S. Such advertising is prohibited for private placements in the U.S.

3. Low cost and ease of issuance. Issuers have greater flexibility in the information that they provide to prospective investors under Regulation S. Therefore, the legal and accounting expenses associated with these offerings are less than private placements in the U.S. The cost of a registered public offering in the U.S. can be $500,000 to $1,000,000 and requires compliance with very strict, complex, time-consuming SEC regulations.

Process for selling Regulation S Stock

Clients who have purchased shares of common stock as a result of a Regulation S stock placement by a United States publicly traded company may sell these shares after a one-year holding period has been satisfied. All sales must comply with Rule 144 of the Securities Act of 1933. Here are the procedures for selling these shares:

1. BSA will nominate a Broker, or you may use your existing brokerage account to sell these securities. The brokers that BSA recommends have demonstrated a great deal of expertise in the sale of restricted securities. If you have an existing account with a U.S. brokerage firm, we urge you ask questions about the frequency with which the broker engages in the sale of U.S. restricted securities. If your broker does not process a high number of these transactions, you may experience lengthy delays. Many brokerage firms outside of the U.S. have no experience with U.S. restricted securities.

2. You will need to contact our recommended brokers directly to open an account. They will answer any questions that you have about their forms.

3. After your new brokerage account has been established, they will assist you with the forms and guide you through the process of providing all information needed to complete the sale of the securities:

• If you have held the restricted shares for at least one year and less than two years, the broker will fill out Form 144 for your signature. Form 144 does not have to be filled out and filed with the U.S. Securities and Exchange Commission if you have held the shares for more than two years.
• The broker will fill out and send a seller’s representation letter to you. Please review it for accuracy, sign it and return it promptly to the broker.
• You will receive information regarding the stock transfer agent’s charges for removal of a restricted legend on each stock certificate and for the issuance of each replacement certificate.
• The broker will advise you that a legal opinion letter is required that states you have met all requirements for the sale of these securities under Rule 144. We have made special arrangements with a U. S. law firm that will:
  (1) allow the broker to handle all communications with the attorney,
  (2) reduce the cost to less than one-third the typical charge for such letters, and
  (3) cause the letter to be issued within one business day instead the customary two weeks or more.
• The broker will instruct you regarding the transfer of funds to your new account to pay for
  (1) the new account fees,
  (2) the stock transfer agent charges and
  (3) the $325.00 (U.S.) fee for obtaining a legal opinion letter through the law firm.

Please note: If you select another law firm to provide the letter, you will be required to provide all necessary information to the attorney and to negotiate the amount of the fee and the time within which that attorney will deliver that letter to your broker.

• You will receive instructions to send the original stock certificate(s) to the broker by Federal Express or a similar secure expedited delivery service. You will also receive instructions to sign a stock power and an assignment of the shares of stock.

4. The time required for clearing a sale of securities after receipt of all documents and funds by the broker can vary. If you request, the broker will try to obtain the most beneficial price for you and other clients. Under those circumstances, the sale is likely to take place between a week and several weeks after your sale order. If you require the broker to make an immediate sale of the shares regardless of the current trading price and regardless of the effect your trade may have on the share price, it will do so and the sale should clear within one week.