Frankfurt Stock Exchange IPO Summary 1. Background of Frankfurt Stock Exchange Frankfurt Stock Exchange is the largest stock exchange in Germany, as well as one of the largest exchanges in Europe. It has far more trading volume than the London Stock Exchange, Madrid Stock Exchange and Paris Exchange. It is responsible for 90 percent of the securities trading volume in Germany. The Frankfurt Exchange facilitates advanced electronic trading, settlement and information systems and enables cross-border trading for international investors. In addition, it is often described as the most efficient exchange place in the world. It is always a great boost for any company that can be listed in the Frankfurt Stock Exchange. The evaluation and visibility of the company will be multiplied many times than before. (Trading currency is calculated by Euro, which has almost 45% more value than USD) 2. Set up a Switzerland Holding Company Any Chinese Company who wants to IPO on Frankfurt Exchange, a Switzerland Holding Company will need to be set up first. Chinese Company can not be listed on Frankfurt Exchange, and the other reasons of forming a Swiss company for Germany Exchange are: • Shares of a Swiss Company can be traded freely in Frankfurt Stock Exchange. • Eases of entry. (Audited financials are not required) • Low cost and maintenance. • Cost effective. • Faster process. 3. Requirements for Incorporating a Swiss Company Switzerland has some of the strictest business laws in the world. If any Chinese business is under a Swiss holding Company, it will gain immediate credibility. Some of the requirements are: • A capital investment is required for a Swiss company to issue stocks. (For example, a capital investment of 1 million Swiss Francs will be able to issue 100 million shares of stocks at a par value of 0.01 Swiss Francs) • The minimum number of subscribers (Board Directors) is 3 • A majority of directors must be Swiss nationals. The minimum number of Swiss director is 2. • Share capital can only be increased 50% at the most of the authorized capital at any one time. For example, maximum additional shares can be issued for the second time will be 50 million shares, if the first time was authorized and issued 100 million shares, and the third time maximum will be allowed to issue 75 million shares. • A minimum of requirement of 35 shareholders for any given company to be listed on Frankfurt Exchange.. There are 26 States in Switzerland. Companies that are incorporated in the State of Zug Canton will be exempted from income tax and stock dividends tax, for the holding Company we intend to form. 4. Responsibilities of the Germany Investment Bank Marko Capital (Shanghai) is the exclusive partner of Hamburg MARKO Investment Bank in China. For last two year, MARKO has successfully taken 18 Swiss companies to list on the open market in the Frankfurt Stock Exchange. (Companies such as Voltavis AG、Swiss FE Group AG、Prime Beteiligungen AG、China Shoe Holding Inc. AG 、IBMC China AG and so on); Our company will be responsible for setting up the Swiss company and merging it with the Chinese Company as its holding company.. After the merger, the Chinese company will be a 100% wholly owned subsidiary of the Swiss company. Chinese Company will have 75% of the 100 million shares of the stock (75 million shares) and MARKO will have the rest 25% of the shares (25 million shares); Our company will also appoint and hire a professional investor relation company to provide investor, public and media relation services during the IPO process, and one year after IPO. The IPO application has to be filed by a Frankfurt Exchange certified underwriter. We will be responsible for finding and signing an accredited underwriter for the IPO application; We will also provide the 35 shareholders; The Chinese Company and Marko will set up its own bank accounts in Swiss Bank. The total 100% of the issued stock will be deposited into the Swiss account. After IPO, we will raise capital by selling the shares in the ratio of 7.5:2.5. All sales proceeds will be direct deposited into the its own share’s Swiss bank account. In consideration of enhancing the Chinese company’s cash flow, MARKO agreed to reinvest 50% of its sales proceeds together with a minimum 50% from Chinese Company to subscript more stocks o raise up the original agreed Capital amount needed for its China operation. 5. Frankfurt IPO Cost Marko Capital (Shanghai) charges a total of RMB 2.5 Million to guarantee the success of Frankfurt IPO. The fee includes: • Set up the Switzerland Company • Lawyer, CPA, and Professional services charges from Switzerland and Germany. • Set up Bank accounts in one of the Switzerland Banks in Zurich • The annual salary of the two Switzerland Directors • Frankfurt Stock Exchange IPO Underwriter’s Application Cost. • Investor Relation Services and PR promotion charges for one year. • Transfer agent fees for one year • MAKRO Investment bankers’ traveling, office and expenses Chinese company will also responsible for its own traveling expenses to Germany and Switzerland including one staff from Makro Capital (Shanghai) accompany. If the IPO in Frankfurt Exchange Open Market is not successful, we will refund the full amount paid.