Customers investing directly in companies they know and trust

At LOYAL3, we believe getting everyday people back into the markets is an antidote to many of the economic dislocations created by Wall Street. As a result, we are passionate about making it easy and affordable for individuals to invest. For everyday people to buy stock directly from companies they know and trust in amounts as little as $10, and to pay no fees whatsoever.

We've developed a Web and Social Media platform called a Customer Stock Ownership Plan, or CSOP™ that enables public companies to sell their stock directly to customers — in just 3 clicks. Customers can buy stock from their favorite brands as easy as they buy products. And they can use credit and debit cards or on-line bank accounts. In some cases, they may even redeem loyalty points for stock.

Some institutions would have you believe that individuals cannot invest without a financial advisor or sophisticated analytical tools. We believe that very supposition has led to a proliferation of fees and a historic deterioration of personal asset values. One often hears that “fear and greed drives Wall Street.” We believe there is a better and healthier set of investing values.

At the core of our Customer Stock Ownership Plan is the proven wisdom of legendary investors such as Warren Buffet and Peter Lynch, who advocate “buying stock in companies you know” and “holding stock for the long-haul.” These principles, coupled with small minimum investment amounts, and no fees to buy or sell stock, define the extraordinary opportunity a CSOP offers to consumers.

CSOPs democratize the markets with easy and affordable access

Today, 81.5% of American families don't directly invest in the stock market. We think that is wrong. There are many reasons including a difficult enrollment process, minimums that are too high, and fees that are too steep, all of which work against everyday, average Americans. As a result, institutional ownership in American companies far exceeds individual ownership, which we believe is unhealthy.

Consider the pervasive ownership stake institutions have taken in many of America’s most well-known consumer brands: Callaway Golf–100%, Nike–95%, and Gap–94%. This trend concentrates influence among a small number of elite institutions and can lead to increases in volatility. Which is why the timing is so right for CSOPs to make stock ownership easy and affordable to everyone.

Easy access and no fees, this seems too good – what’s the catch?

There is no catch. Our platform has removed substantial costs from the system. And since CSOPs are 100% paperless, they are innately cost effective. Additionally, studies by Bain and Co. and Opinion Research Corp. show that customers who are also owners are more loyal and valuable than ordinary customers. As a result, our clients are motivated to make it easy and affordable for their customers to buy their stock.

Companies pay our fees so that their customers pay no fees whatsoever. And we administer fractional shares so customers can buy dollar-denominated amounts of as little as $10, even though many stocks have share prices substantially higher than $10. This affordability feature empowers more customers to participate in a CSOP, which is good for customers, and good for companies.

Customer Ownership – creating unprecedented value for companies

Our CSOP is an innovative means for companies to create dramatically more valuable customers – and the increased loyalty of customer-owners is measurable. According to Bain & Company data, customer-owners spend on average 54% more, refer twice as many people, and increase tenure 10% more than ordinary customers. In short, ownership impacts consumer behavior.

LOYAL3 is built on a simple and yet profound principle that people care more about things they own than things they don’t. Companies have long used ownership to align and motivate employees, and now through a CSOP, they can use ownership to align and motivate another important stakeholder: customers. It is a natural progression of ownership as a unique and powerful loyalty and brand currency.

Ownership Changes Everything

Imagine a world where companies are motivated to connect with customers and offer them stock directly. Where tens of millions of Americans who do not currently have a viable way to make a direct stock purchase, can now have access to an easy and affordable platform to invest in their favorite brands in amounts as little as $10, and pay no fees whatsoever.

This is the reality made possible by the innovative people at LOYAL3, who have invented the CSOP. It is an exciting time, and we invite consumers to check back periodically for updates, including our initial launch date, currently planned for Q1 2012, and our initial launch companies. And we invite public company executives to contact us to find out how easy and valuable it is to implement a branded CSOP.

Customer ownership changes everything. Companies win with more loyal and valuable customers and increased brand engagement. Consumers win with an easy and affordable way to buy stock directly from companies they know and trust. And the American economy wins with new and potentially large capital in-flows from “buy and hold” Main Street investors to support and balance its markets.

Doesn’t that just feel right?

Sincerely,

Barry Schneider
Chairman & CEO
LOYAL3 Holdings, Inc.