| Bob Sherman Credit |
How Should You Go Public?
There are different methods to go public in the US. There are three main stages of listing:
Here are the levels of quotation listing.
OTC PINK SHEETS:
The oldest quotation service for over the counter stocks usually termed "the pinks". There are technically no prerequisites for reports or audited financials on the pinks, however, the pinks have established their own voluntary reporting system and enforce it by publishing symbols to indicate the level of disclosure each organization is subscribing to. To publish voluntary information requires fees of roughly $5000 a year.
THE OTC BB: The OTC Bulletin Board is controlled by the Financial Industry Regulatory Authority (FINRA) and mandates that all companies whose stock is exchanged on the OTC Bulletin Board maintain their current reporting status with the Securities and Exchange Commission (SEC), which needs current audited financial statements. There are no charges paid to FINRA for this quotation, but keeping a public company current with its SEC reports can cost $25,000 - $50,000 per year.
EXCHANGES:
The OTC PINK SHEETS and the OTC Bulletin Board are useful stock markets particularly for emerging and new companies, but clients with well known businesses will want to be on one of the developed and higher stock markets - Nasdaq Small-Cap, Nasdaq NMS or NYSE. Each of these exchanges has its own qualifications that a company must meet to be listed on the exchange. Typically the types of qualification elements they look for include asset levels, number of financial partners, required Board level committees, revenues, and market capitalization. In addition all exchanges want the company to maintain a current reporting status in the Securities and Exchange Commission (SEC). Listing on the stock markets usually involves fees in the range of hundreds of thousands of dollars.
For a US company a listing on the US stock markets improve points. For Example, a quotation is a method to:
1) Grow your company faster and make it more strong by increasing your ability to attract "mergers", "acquisitions" as well as "strategic partners;
2) Develop your company faster and make it more powerful by increasing its ability to compete for large corporate contracts;
3) Strengthen your personal profit as an owner by minimizing the amount of time it will take to make money on your investment, and also increasing the valuation of your company, as well as, converting the liquidity of your asset to a much more liquid form than that of a private company;
4)Raise money faster and cheaper by improving the "liquidity" factor for your shareholders
Now most of these factors are for companies going public from scratch. For those of you seeking to buy a shell corporation (public shell), to try mergers, then you might want to look at changing a quotation as above. For more information on this subject try googling keywords like "mergers companies" or "reverse mergers".
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