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Going Public Process
Following are the requirements to file with
the SEC to go public on the OTC Bulletin
Board:
1.
The company is earning revenue, or if
not earning revenue, the company can
show that it is a real business with one
or more employees working fulltime in
the business. The company need only be
in business for a short time, as little
as one month. The company also needs to
be incorporated, have a bank account and
have auditable financial records;
2. The company
has or can obtain no less than 40
shareholders in order to be
“public”. If a company is unable to
secure 40 shareholders on their own,
we
are able to seed
the company with the
minimum number;
3. The
non-insider shareholders (excluding
management) must have purchased a
minimum of 400,000 shares of the
company’s stock that can be
registered with the SEC as the
“float” when the company is listed
and publicly trading, e.g. 40
shareholders pay $2,000 each and buy
shares at 20 cents so they get
10,000 shares each. Those 10,000
shares x 40 shareholders equals
400,000 total shares or $80,000
which in most cases will cover the
entire cost of going public;
4. In order to be
eligible to go public the company
needs to hire an auditor and obtain
an SEC qualified audit. The company
then needs to hire an SEC qualified
Attorney whom can prepare and file
the SB-1 registration statement;
5. From the time
the audit is complete and the
registration statement is filed by
the attorney, the fastest the
company can become public with a
stock symbol is 60 days (Our entire
process takes 4-months). Sometimes
it can take up to six months if the
SEC has a lot of questions about the
history of the company or other
items contained in the registration
statement or audit. Once the company
is cleared by the SEC (referred to
as “going
effective”) it
needs to be approved by NASD (now
called FINRA). That process takes
about 30 days and the company needs
to be sponsored by a Broker-Dealer,
whom we will assist you with;
6. Our process takes the company
public
for as little as $150,000 plus the cost
of audit (all costs are usually
covered by initial shareholders).
For companies with a longer
operating history, complex legal
and/or accounting issues, total
costs could be as high as $300,000;
7. Once a company
has its stock ticker symbol it can
proceed to arrange various different
funding programs that are not
available to private
companies
which we, and our resources will
help to arrange. PIPE funding
(Private Investment in Public
Equity) would be one of the sources
for funding, being dually listed on
select EU exchanges may be another
alternative. |
