Public Company

SRC Rule 3.1(M)

M. Public Company means any corporation with a class of equity
securities listed on an Exchange or with assets in excess of Fifty
Million Pesos (P50,000,000.00) and having two hundred (200) or
more holders, at least two hundred (200) of which are holding at
least one hundred (100) shares of a class of its equity securities.

A public corporation is a corporation owned by members of the public by

virtue of their having purchased shares in its ownership on the open
market. Public corporations sell shares in their ownership because large
amounts of capital can be raised very quickly with a public stock
offering. In the United States, many aspects of a public corporation's
operations, especially its relationship with its shareholders, are closely
scrutinized and regulated by the Securities and Exchange Commission
(SEC), an agency established by the US government in 1934, as part of
its response to the great depression, to regulate the stock markets and
prevent abuses by corporations.
To become a public corporation, a business must first incorporate that
is, become a corporation. Incorporation is a legal process that gives the
company an official legal personality. Corporations may thus be
characterized as a fictional person, a legal person, or a moral person, as
opposed to a natural person. Corporations have many of the same rights
as natural people, such as signing contracts, and many of the same
responsibilities: corporations must obey the same laws as everyone else,
as well as corporate laws enacted to govern corporate behavior. They may
not vote, however, and are not expected to sit on juries, although they are
taxed.
Three features common to any incorporated firm is that leadership is
vested in a board of directors, ownership is shared among those who've
contributed capital to the corporation, and that ownership can be
exchanged via the sale or transfer of shares of stock. Only the shares of a
public corporation may be sold to the public in the open market, though.
Once incorporated, a corporation must then request approval from the

SEC to offer its shares to the public on one of the major exchanges.
When approval is granted, the shares are sold by the corporation to the
public in an Initial Public Offering (IPO). The proceeds of the sales in
the IPO go back to the company, which is the reason for selling shares in
the first place; many IPOs have raised billions of US Dollars (USD) for the
corporations issuing them. Subsequent sales of the corporation's stock
are usually between investors, and none of the money involved in those
transactions goes back to the corporation. Many corporations retain
ownership of some of their stock to sell at a future date to raise money.
While a public corporation sells shares in its ownership to raise money
quickly, members of the public usually buy those shares in anticipation
of the investment gaining value over time. This can happen in two
different ways. The first is appreciation of the stock price itself &emdash;
the price of a company's stock reflects its fortunes in the marketplace
&emdash; and when a company does well, its stock generally increases
in value. The second is the anticipation of dividends &emdash; periodic
payments made by many corporations to their shareholders. These
payments are determined by the corporation's board of directors and are
based on the corporation's performance.
While shares of stock in any public corporation may periodically decline
in value, stock ownership in general, and especially of a portfolio
consisting of many different stocks, is usually considered a safe long
term investment because in the past, such investments generally have
performed very well over time.
What's the difference between publicly- and privately-held companies?
Privately-held companies are - no surprise here - privately held. This
means that, in most cases, the company is owned by the company's
founders, management or a group of private investors. A public company,
on the other hand, is a company that has sold a portion of itself to the
public via an initial public offering of some of its stock, meaning
shareholders have claim to part of the company's assets and profits.
One of the biggest differences between the two types of companies deals
with public disclosure. If it's a public U.S. company, which means it is
trading on a U.S. stock exchange, it is typically required to file quarterly
earnings reports (among other things) with the Securities and Exchange

Commission (SEC). This information is also made available to

shareholders and the public. Private companies, however, are not
required to disclose their financial information to anyone since they do
not trade stock on a stock exchange.
The main advantage public companies have is their ability to tap the
financial markets by selling stock (equity) or bonds (debt) to raise capital
(i.e. cash) for expansion and projects. The main advantage to private
companies is that management doesn't have to answer to stockholders
and isn't required to file disclosure statements with the SEC. However, a
private company can't dip into the public capital markets and must
therefore turn to private funding, which can boost the cost of capital and
may limit expansion. It has been said often that private companies seek
to minimize the tax bite, while public companies seek to increase profits
for shareholders.
The popular misconception is that privately-held companies are small
and of little interest. In fact, there are many big-name companies that are
also privately held - check out the Forbes.com list of the largest private
companies in 2006.

6.

Material Information
SRC Rule 3.1(I)
I. Material Fact/Information means any fact/information that
could result in a change in the market price or value of any of the
issuers securities, or would potentially affect the investment
decision of an investor. See Rule 14 (1) for a non-exclusive
enumeration of what constitutes material fact or information.
PSE Disclosure Rules, Sec. 4.3 & 4.4

SRC Rule 14 Amendments to Registration Statement

1.
For the purpose of this rule, material information shall include,
but not limited to, the following:
A
Any event or transaction which increases or creates a risk on the
investments or on the securities covered by the registration;
B
Increase/Decrease in the volume of the securities being offered at
the issue price higher/lower than the range set and disclosed in the
registration statement and which results to a derogation of the rights of
existing security holders, as may be determined by the Commission;
C

Major change in the primary business of the registrant;

Reorganization of the company

Change in the work program or use of proceeds;

F
Loss, deterioration, or substitution of the property underlying the
securities;
G
Significant or ten percent (10%) or more change in the financial
condition or results of operation of the registrant unless a report to that
effect is filed with the Commission and furnished the prospective
purchaser;
H
Classification, declassification or re-classification of securities
which results to derogation of rights of existing security holders, as may
be determined by the Commission.