​​What is needed to go public?

  1. Company established.

  2. Audited financials of the operating Company will be necessary.

  3. The general process to achieve OTC status (unless through reverse merger with a trading shell company * See definition) is a process that takes a minimum of 4-6 months to achieve.

 

So what now? Where do I go next?

The fees to become an OTC Company can vary quite a bit depending upon your desired time frame. Of course, this means that the quicker you want this process completed the more expensive it will be. A few things must first be understood, regardless of the situation, to achieve this goal of taking a company public on the OTC.

Pick the option that best suits your needs.

 

I want to get my company trading on the OTC as fast as possible

The fastest way, from scratch, without reverse merging into an existing trading company is to file an S-1 Registration Statement or Regulation A + Offering. These are Registration Statements filed with the SEC which register the restricted securities (stock) of your operating company that your current investors have, and subsequently grants your company status as an SEC Reporting Company.

Upon effectiveness of the S-1 or Qualification of the Regulation A + Offering, which generally takes between 4-6 months because the SEC responds to each submission with comments that must then be addressed, a market maker will then be able to file what is called Form 211 and also gain DTC eligibility. For a detailed explanation of the two previous terms see the above definitions. DTC eligibility is not absolutely necessary but it is something that most companies prefer to have because it allows their stock to be electronically traded. A stock transfer agent that keeps a record of the shareholders of a company and also a market maker to make a market in the securities being registered comes next. After the previous steps are taken a symbol can then be obtained and your company can gain full status on the OTC marketplace.

I want to get my company trading but I am not in a rush

and / or I want to keep costs down

An S-1 Registration Statement can be fairly costly. If one is trying to conserve capital or is not in a rush to get trading on the OTC marketplace they may decide to utilize a Form 10 Shell Company when taking a company public. A merger with a Form 10 shell company can be completed fast in as little as two weeks.

First the operating company that seeks to become trading will reverse merge their business into the SEC Reporting Form 10 Shell Company. The Form 10 Shell Company usually changes its name to that of the operating company once completed.

Following the reverse merger into the Form 10 shell the buyer's company can then wait one year from the date of filing for the restricted securities held by shareholders to become freely tradable. Once this happens an S-1 will not be necessary. One can then file a Form 211 and gain DTC Eligibility. The next required step is to find a stock transfer agent to keep a record of shareholders and a market maker to make a market in the securities. At this point a symbol can be achieved and the company will be an OTC Company.

At GoldShire our skilled staff can help you register your shares of restricted stock! Please read below for more information on S-1 Registration Statements.

The S-1 Registration Statement: What is it? What is it for?

An S-1 Registration Statement is a lengthy form used by companies to register their individual securities for sale or to register restricted securities held by others for resale. Unfortunately, for most companies this is a lot more complicated than it may seem. An S-1 is usually composed of a very detailed description of the business that is filing the S-1, as well as the company's future operations, intentions, and their plan of action. It also contains several provisions that may highlight any difficulties, foreseen or unforeseen circumstances, which may affect the company in the future.

An S-1 contains an in-depth prospectus for possible investors to consider prior to investing. This form registers individual securities and subjects the company filing the S-1 to be an SEC (Securities and Exchange Commission) reporting company that is expected to have ongoing filings, audits, and other information updated on a regular basis.

When filing an S-1 registration statement a company must, in most cases, have an existing shareholder base of roughly 35 individuals who are unaffiliated with the business. If a company does not have 35 shareholders at the time of filing an S-1 there are several paths that can be taken. The most common route is through a Regulation D (506) offering. Known as a 506 offering, or "Reg. D offering", this allows a company to sell restricted securities to individuals after filing a form D with the SEC. At the point when the company acquires around 35 or so shareholders they can then file the S-1, which in turn converts these previously sold restricted shares of stock to free trading shares that can be sold to whomever. This process offers liquidity and a clear and concise exit strategy to investors.

Usually this process takes between Four to Six months, but can be either higher or lower depending on the size of the company. However, a company need not wait for this process to be fully complete in order to take additional action. So long as the S-1 has been filed then the filing company can take the next steps to obtain a CUSIP number and ultimately land on the Over the Counter Market Place, (Pink Sheets), OTCBB or even NASDAQ if the company so qualifies. Audited financial statements would be required to be filed with the S-1 registration for the last two or three years by a PCAOB accountant.

There are also many provisions that follow successful filing of an S-1 such as Blue Sky Laws and the qualifications that investors must meet to be able to buy any outstanding securities. Additionally, one cannot freely advertise these free trading securities to the general public. The filing of an S-1 Registration Statement is a costly endeavor, but more than anything else it is an investment. It may be slow to fruition, considering the full process can take up to a full year, but it provides companies the ability to gain all important free trading stock and it also allows said companies to come one step closer to being able to trade on the Over the Counter Market Place, OTCBB or any other market.

If you are interested in having us write a registration statement for your company please refer to our contact information and send us an email inquiry for all associated information and prices.

 

Regulation A + Offerings

Regulation A + Offerings accomplish all of the same things as the S-1 Registration Statement and the timeline is comparable, however there are several key differences that are outlined below. On March 25, 2015, the SEC adopted new rules that update and expand Regulation A, an existing exemption from SEC registration for small companies seeking to raise money in the public markets. The new rules, which are referred to as "Regulation A +", create two tiers of securities offerings:

  • Tier 1, which consists of public offerings up to $ 20 million in a 12-month period, with no more than $ 6 million in offers by selling security-holders that are affiliates of the issuer; and

  • Tier 2, for public offerings up to $ 50 million in a 12-month period, with no more than $ 15 million in offers by selling security-holders that are affiliates of the issuer.

Most importantly for companies, the new rules provide for the preemption of state Blue Sky laws in Tier 2 offerings. Tier 1 offerings will be subject to federal and state registration and qualification requirements, but for state qualification issuers may take advantage of a coordinated review program developed by the North American Securities Administrators Association (NASAA).

In addition, Regulation A + securities purchased by non-affiliates are free trading from day one. So, an ongoing secondary market can develop for investors, leading to lower capital costs for issuers.

Both Tiers are subject to certain basic requirements as to issuer eligibility, disclosure, and other matters. Tier 2 offerings are subject to additional disclosure and ongoing reporting requirements, including: a requirement to file audited financial statements in the offering document, annual audited financial statements, and semiannual and current event reports. The new rules also place a limitation on the amount of securities non-accredited investors can purchase in a Tier 2 offering of no more than 10% of the greater of the investor's annual income or net worth.

As to eligibility, the Regulation A + exemption will be limited to companies based in the US or Canada and to companies that are not currently SEC reporting. Blank-check companies, funds required to register under the Investment Company Act, companies that are seeking to offer and sell asset-backed securities or fractional undivided interests in oil, gas or other mineral rights, and those whose SEC registration has been revoked within the past five years or who are disqualified under the "bad actor" qualification rules are not eligible.

If you are interested in having us write a registration statement for your company please refer to our contact information and send us an email inquiry for all associated information and prices.

 

Rule 506 of Regulation D

If your company is looking to raise funds from investors through Rule 506 of Regulation D, then you will need what is called a Private Placement Memorandum (PPM). This is a document that highlights the business, what it does, how it works, the risks involved if someone is willing to invest in it, and explains the offering of restricted securities that are usually supplemented by several key financial statements. Think of it simply as all the information a potential investor could need or want compiled into one easy to read, visually pleasing and well-organized document.

In many cases, if not all, this document also includes pictures, graphics, and other elements that make it appealing to potential investors. A Private Placement Memorandum is most commonly used as a tool to present to investors before they make the decision to purchase equity in a company.

For inquiries regarding a Private Placement Memorandum please send us an email through our contact information. In this message describe what your business does, your company's goals and any other questions or relevant information you might have.

 

FULL SERVICES PROVIDED

We provide full SEC filing services! For your company we can file SEC forms 10-12G, S-1, 8-K, SC-13 D, 10-Q, 10-K and just about any other SEC document. We can also ensure it will contain all required information, be clear of any errors, conform to all SEC rules and regulations, and will be presented in a visually pleasing manner. We utilize top of the line software to complete all of our filings. This ensures that every document we file will be far superior to those done manually by less skilled and knowledgeable individuals. Due to the difficulty involved it is not uncommon for manual filings by other individuals or teams to have misplaced information and grammatical errors.

All of our filings are done to the highest standards and will be far superior to what can be found elsewhere. In addition, any and all filings that require interactive data will be completed to comply with SEC Regulations.

 

​Business Structuring

In addition to our broad range of services and available form 10 shell companies we have for sale, we at GoldShire can help structure your business to protect it from any potential liabilities. Alternatively we can help to optimize it so that a certain group of individuals will be able to maintain control when your company does end up going public.

Consultation

If your company is looking to merge with another company through the use of a form 10 shell or otherwise, has questions about how to structure certain transactions, or would like to ask our opinion on any related matter, we can offer you a turnkey solution on how to best construct such operations for a nominal fee.

Business Plans

One of the most important ways to get your company's idea off the ground, or to interest future investors and clients, is to create an effective business plan. We can write professional and visually appealing business plans for a very reasonable fee that varies on a case by case basis. Every company is different and so are the needs of every client; for serious inquiries please refer to our contact information.

We may offer a complimentary business plan review to our clients who choose to purchase a Form 10 shell.

­

© 2019 by GoldShire Consulting, Inc