Growing Your NHO Enterprise Karl Kaluhiokalani, Chairman August 1, 2018

Strategies for Growth Two Primary Ways to Expand Ownership of For-Profit Companies New Organization Start-Up Acquisitions

New Organization Start-Up File Corporate Documents Establish By-Laws Obtain Tax ID’s Obtain DUNS Number Register in SAM & Obtain Cage Code Develop Business & Marketing Plan Prepare SBA 8(a) Application

New Organization Financial Requirements for SBA 8(a) (h) An applicant concern owned by a NHO must possess reasonable prospects for success in competing in the private sector if admitted to the 8(a) BD program. An applicant concern owned by a NHO may establish potential for success by demonstrating that: It has been in business for at least two years, as evidenced by income tax returns (individual or consolidated) for each of the two previous tax years showing operating revenues in the primary industry in which the applicant is seeking 8(a) BD certification; or (2) The individual(s) who will manage and control the daily business operations of the firm have substantial technical and management experience, the applicant has a record of successful performance on contracts from governmental or nongovernmental sources in its primary industry category, and the applicant has adequate capital to sustain its operations and carry out its business plan as a Participant; or (3) The NHO has made a firm written commitment to support the operations of the applicant concern and it has the financial ability to do so.

Identify Target for Acquisition Making an Acquisition Identify Target for Acquisition Determine Interest for Sale Conduct Due Diligence Negotiate Agreements Prepare SBA Documentation

Acquisition Financial Requirements for SBA 8(a) Purchase Agreement Valuation Basis for Purchase Price Three Years of Tax Returns P&L and Balance Sheets for Most Recent Quarter Front & Back Copies of Stock Certificates and Ledgers (Corp) Transfer Documents for Other Than Stock Corporations Follow Potential for Success Guidance 13 CFR 124.110 (h)

IRS Regulations Prohibit Stock Ownership in “S” Corporations Limitations On Stock Ownership By Non-Profit IRS Regulations Prohibit Stock Ownership in “S” Corporations Exception for 501(c)(3) Approved Organizations

Good Luck! Review Procedures on Certify.SBA.Gov File SBA 8(a) Application Review Procedures on Certify.SBA.Gov Download Entity Work Around Follow Work Around Instructions Provide as Much Detail as Possible Good Luck!

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