The Role of the Direct Public Offering Attorney

Going Public LawyerSecurities Lawyer 101 Blog

The direct public offering (“Direct Public Offering“) has become the premier method used in going public transactions.  A skilled Direct Public Offering attorney can guide a private company through the Direct Public Offering process. A Direct Public Offering allows a company to publicly offer and sell unrestricted securities directly to investors without the use of an underwriter.

A Direct Public Offering attorney will assist the issuer in preparing and filings its registration statement with the Securities and Exchange Commission (“SEC”) to register a securities offering under the Securities Act of 1933, as amended (the “Securities Act”).

Typically, in going public transactions involving direct public offerings, a Form S-1 (“S-1”) registration statement is used. A company can use Form S-1 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 its selling security holders.  The issuer’s Direct Public Offering attorney will typically render the required legal opinion for its Form S-1 or other SEC registration statement.

Using a Direct Public Offering to Go Public

All issuers qualify to register their direct public offering on Form S-1 and the form is the most common registration statement form used by Direct Public Offering attorneys.  Using a registration statement instead of a reverse merger eliminates many of the risks associated with reverse merger transactions and if done properly, provide transparency to investors.  Common reverse merger risks include among other things, undisclosed liabilities, sketchy corporate records, DTC Chills, Global Locks, SEC trading suspensions and securities lawyers with dual conflicting roles.

SEC Review of Registration Statements in Direct Public Offerings

SEC review of the Form S-1 registration statement is common. Upon review, the SEC may render comments which the company 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.

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. The registration statement will cause the company to become subject to the SEC’s reporting requirements. 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 issuer’s direct public offering attorney will then locate its sponsoring market maker.

The Last Step for Issuers Going Public l Getting a Ticker Symbol

Generally, FINRA requires that the issuer have at least 35 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 these holders should have paid cash consideration for their shares.

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.

The 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 attorney 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.

For a company seeking public company status a direct public offering offers a cost and time effective solution. Direct Public Offerings allow issuers to go public using their on their own schedule without the added pressure from underwriters who impose deadlines. Underwriter deadlines often place severe strains on companies going public particularly where management is unfamiliar with SEC disclosures and requirements. Additionally, by undertaking a Direct Public Offering, the issuer avoids many of the expenses and risks associated with reverse merger transactions including incomplete and sloppy corporate and other records, pending lawsuits and other liabilities including securities violations.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton Florida, (561) 416-8956, by email at [email protected] or visit

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, crowdfunding, 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, Direct Public Offering Attorneys, OTC Pink Sheet listings, Form 10 OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton and Associates at (561) 416-8956 or [email protected]. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Direct Public Offering Attorneys
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855

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