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What Are The Procedures To Go Public?
There are different ways to go public in the US. There are three major stages of listing:
Here are the levels of stock listing.
OTC PINK SHEETS:
The most well-known quotation service for over the counter financial instruments usually referred to as "the pinks". There are technically no prerequisites for reports or audited financials on the pinks, however, the pinks have instituted their own voluntary reporting system and enforce it by publishing symbols to represent the level of disclosure each organization is subscribing to. To publish voluntary particulars requires charges of around $5000 a year.
THE OTC BB: The OTC Bulletin Board is operated by the Financial Industry Regulatory Authority (FINRA) and mandates that all companies whose stock is traded on the OTC Bulletin Board maintain their current reporting status with the Securities and Exchange Commission (SEC), which includes current audited financial statements. There are no charges paid to FINRA for this quotation, but having a public company current with its SEC reports can easily cost $25,000 - $50,000 annually.
EXCHANGES:
The OTC PINK SHEETS and the OTC Bulletin Board are viable stock markets particularly for emerging and new companies, but clients with well established businesses will want to be on one of the mature and higher stock markets - Nasdaq Small-Cap, Nasdaq NMS or NYSE. Each of these stock exchanges has its own qualifications that a firm must meet to be listed on the exchange. Generally the types of qualification variables they look for include asset levels, number of financial partners, required Board level committees, revenues, and market capitalization. In addition all exchanges require the company to maintain a current reporting status with the Securities and Exchange Commission (SEC). Listing on the stock markets usually involves expenses of nearly hundreds of thousands of dollars.
For a US company a listing on the US stock markets leverage points. For Example, a quotation is a method to:
1) Grow your company faster and make it more powerful by increasing your ability to attract "mergers", "acquisitions" and "strategic partners;
2) Develop your company faster and make it more powerful by developing its ability to compete for large corporate deals;
3) Maximize your personal return on investment as an owner by minimizing the amount of time it will take to make money on your investment, as well as increasing the valuation of your company, as well as, changing the liquidity of your asset to a more liquid form than that of a private business;
4)Raise money more quickly and cheaper by improving the "liquidity" factor for your investors
Now most of these factors are for companies going public from scratch. For those of you looking to buy a shell corporation (public shell), to do mergers, then you might want to look at changing a quotation as mentioned above. For more tips on this subject try googling terms like "mergers companies" or "reverse mergers".
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