Both the Dutch auction and the traditional underwritten offering are types of public offerings.

However,
they differ in the process of issuance and the risk (cost) which either the underwriter or S&S Air bear.
Both are methods of raising capital for the firm via the issuance of new securities.

A private company can sell its share through the initial public offering to become a public company using
the traditional IPo pricing method or the Dutch Action pricing method.
The conventional method ebtails the offering company to hire underwriters,who ussually are investment
banks,to oversee the sale of the company's sucurities.In the Traditionao IPO process investment banks
often determine securities price by assessing the demand for such shares.The underwriters then conclude
on the share price ranges after contacting different funding banks and other leading investors whipe on
roadshows.
While S&S Air still incurs the flotation cost in this type of IPO, the risk of failing to sell enough shares to
cover this cost and raise the required capital is mitigated. Given the descriptions of both traditional cash
offering IPOs and the Dutch auction process it is recommended S&S Air move forward with Crowe &
Mallard and a Dutch auction IPO. This recommendation is because of the mitigated cost of underpricing
the IPO. While the Dutch auction will not eliminate all of the flotation costs associated with the IPO it
will allow the market to determine the optimal price, via economic supply and demand, at which the
shares should be bought, helping to insure all issued securities are sold.
Traditionally, they have relied on large investment banking firms to gauge interest in their stock and set
the price on their initial public offering. The IPO price is the price privileged investors selected by the
company and by investment bankers pay for the stock. Those shares can then be re-sold, with the price set
by supply and demand in the market at large.Setting an IPO's initial offering price, by contrast, is based
purely on human judgment. An IPO price, offered to the initial buyers, can be set too high or too low. For
instance, during the late 1990s, many IPOs soared on their first day of trading as underwriters set prices
too low. Because of those miscalculations, the companies going public left a lot of money on the table.

The Dutch auction attempts to eliminate that kind of problem by letting any investor who is interested tell
the underwriter how much they would be willing to pay for shares. The underwriter then uses the bids to
determine the maximum price at which all the shares would be sold.
The goal of a Dutch auction is to get the maximum share price for the company. If a Dutch auction is
successful, the company's stock price should move only slightly when it begins trading publicly.

The initial public offering or IPO can be an exciting time in the history of a business. The IPO signals the
entry of the business into the world of the stock market, allowing investors to buy and trade the
company's stock. Company employees usually have the opportunity to get in on an initial public offering
if the company makes the offering known. A tender offer is a structured, company-sponsored liquidity
event that typically allows multiple sellers to tender their shares either to an investor or back to the
company. In other words, it’s a potential way for you to sell some of your shares while your company is
still private. Tender offers provide several advantages to investors. For example, investors are not
obligated to buy shares until a set number is tendered, which eliminates large upfront cash outlays and
prevents investors from liquidating stock positions if offers fail. Acquirers can also include escape
clauses, releasing liability for buying shares. For example, if the government rejects a proposed
acquisition citing antitrust violations, the acquirer can refuse to buy tendered shares.
In many instances, investors gain control of target companies in less than one month if shareholders
accept their offers; they also generally earn more than normal investments in the stock market.
Retaining stock and selling it onece S&S Air goes public has advantages .An Advantage of stock of sale
through the secondary market includes the employees can generate income for their shares immediately
and more cobventily as there is no lock up period as in the IP0 Process.
I would advise the S&S employees to tender their shares to be sold at the IPO offering price because the
risk associated with this option is minimal.

The decision of an employee to tender their shares of stock in the S&S Air IPO or retain them and sell
them in the secondary market after the IPO is an individual risk decision. The risks associated with
tendering them in the initial IPO include being subject to underpricing of the stock as previously
mentioned. herefore, I would advise them that the risk is a personal one. If they wish to tender their shares
in the IPO, they are taking a larger risk than if they wait until after the IPO, playing it safe until the price
stabilizes in the secondary market. It is a matter of personal risk tolerance. Employees must realize that
failure to comply with the lockup period may result in legal action as a result of insider trading SEC
regulation.

Rakin
Chris is suggesting a conversion price of $25 because it means the stock price will have to increase before
the bondholders can benefit from the conversion. Even though the company is not publicly traded, the
conversion price is important. First, the company may go public in the future. The conversion price is part
of determining the number of shares to be received upon conversion. If shares never close above the
conversion price, the convertible bond is never converted to common shares. Usually, the conversion
price is set at a significant amount higher than the current price of the common stock to make conversion
desirable only if a company's common shares experience a significant increase in value.

Eshu

The conversion price is the price per share at which a convertible security, such as corporate bonds or
preferred shares, can be converted into common stock. Chris is suggesting a conversion price of $25
because it means the stock price will have to increase before the bondholders can benefit from the
conversion. The conversion price is set by management as part of the conversion ratio before the
convertibles are issued to the public. The conversion ratio is the par value of the convertible security
divided by the conversion price. The conversion price is part of determining the number of shares to be
received upon conversion. If shares never close above the conversion price, the convertible bond is never
converted to common shares.

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Rakin