The Role of the Direct Public Offering Lawyer
One of the most efficient and cost effective ways to achieve public company status is by using a Direct Public Offering. The Direct Public Offering Lawyers at Hamilton & Associates will assist you with your Direct Public Offering using a registration statement.
Direct Public Offerings can be structured a variety of ways. A company can use a Form S-1 registration statement to register securities on its own behalf in an initial public offering, register securities on behalf of its selling security holders in a secondary offering or register securities on its own behalf as well as for selling security holders.
All issuers qualify to file a registration statement on Form S-1 and it is the most common registration statement form used in going public transactions.
Allowing the Direct Public Offering Lawyers to assist your company with its going public transaction eliminates the risks associated with reverse mergers including among other things, undisclosed liabilities, sketchy corporate records, DTC Chills, Global Locks and SEC trading suspensions.
The Direct Public Offering Lawyer & the SEC Review
For public companies and private companies going public, an SEC review of the Form S-1 registration statement is common. Upon review, the SEC may render comments which the company and its Direct Public Offering Lawyer must address by filing amendments to its registration statement. When all of the SEC comments have been answered to the satisfaction of the SEC, it will declare the registration statement effective.
Additional Steps for the Direct Public Offering Lawyer in Going Public Transactions
The registration statement will cause the company to become subject to the SEC’s reporting requirements. Filing an S-1 registration statement under any of the above scenarios will not complete the going public transaction. A registration statement alone does not cause an issuer’s securities to become publicly traded and it will not result in the assignment of a ticker symbol. Many issuers who do not select an experienced Direct Public Offering Lawyer find themselves reporting with the SEC but without a stock trading symbol. After satisfying the SEC’s requirements, the issuer must comply with the requirements of the Financial Industry Regulatory Authority (“FINRA”) to obtain its ticker symbol.
The Last Step for The Direct Public Offering Lawyer– Getting a Ticker Symbol
Generally, FINRA requires that the issuer have at least 25 shareholders who hold either registered shares or with respect to Pink Sheet listed issuers, shares that have been held by non-affiliate investors for twelve months. The majority of the 25 holders should have paid cash consideration for their shares.
Float Requirements in Going Public Transactions
In order to obtain a ticker symbol, a company must meet FINRA’s public float requirements. The company’s outstanding shares held by its non-affiliates in the aggregate should represent at least 10% of the issuer’s outstanding securities. These shares become what is often referred to as the “Float.” The Float must also be somewhat evenly distributed without significant concentration in one or a few shareholders. These shares should be unrestricted securities either because the shares were registered with the SEC or exempt from registration.
Sponsoring Market Maker & Form 211
FINRA requires companies to locate a sponsoring market maker to submit a Form 211 (“211”), on its behalf. Upon the sponsoring market maker filing a 211, FINRA will conduct a review and provide comments to the sponsoring market maker which the company and its securities lawyer must address. Upon receipt of confirmation that all comments have been answered satisfactorily, a ticker symbol is assigned and the company’s securities are publicly traded.
By undertaking a Direct Public Offering, the issuer avoids many of the expenses and risks associated with reverse merger transactions including incomplete and sloppy records, pending lawsuits and other liabilities including securities violations. For a company seeking public company status a direct public offering using a registration statement filing with the SEC offers a cost and time effective solution.
This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. For more information about going public and the rules and regulations affecting the use of Rule 144, Form 8K,FINRA Rule 6490, Rule 506 private placement offerings and memorandums, Regulation A, Rule 504 offerings, SEC reporting requirements, SEC registration statements on Form S-1 , IPO’s, OTC Pink Sheet listings, Form 10 and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton & Associates at (561) 416-8956 or [email protected]. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Direct Public Offering Lawyer
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855