GOING PUBLIC 101 Q&A

E V E RY T H I N G YO U WA N T E D T O K N O W A BO U T G O I N G P U B L I C
BUT WERE AFRAID TO ASK

WHAT DOES IT MEAN TO GO PUBLIC ?

Going public often refers to the process of a company
filing a registration statement with the Securities &
Exchange Commission to register its securities and
become a reporting company. This process is referred to
as going public even if the Company does not have a
stock ticker symbol and its shares do not trade.
Going public may also refer to the filing a Form 211 with
FINRA to obtain a ticker symbol for quotation on the
OTC Markets without filing a registration statement with
the Securities & Exchange Commission.

WHY DO MOST COMPANIES GO PUBLIC?

Most companies go public to raise capital. It is

much easier for a public company to locate capital
than it is for a private company.
Funds raised in going public transactions can be
used for working capital, research and development,
retiring existing indebtedness, acquiring other
companies or businesses or paying suppliers.

BENEFITS OF GOING PUBLIC

Once a going public transaction is complete, a company can
use its common stock as currency & collateral for loans.
Going public creates value for a companys shares & creates
liquidity for existing and future investors.
Going Public provides an exit strategy for shareholders
and/or investors.
Public company stockholders may be able to sell their shares
or use them as collateral.
Public companies have greater visibility than private
companies and are often featured by the media.
Going public allows a private company to attract more
qualified employees and key personnel.
A certain amount of prestige is associated with public
company status or service to a public company.

WHAT IS A REVERSE MERGER?

A reverse merger is a transaction in which a private
company merges into or is acquired by an existing
public company.
After a reverse merger is complete, the business
and management of the privately held company
becomes that of the public entity.
IS A REVERSE MERGER REQUIRED TO GO PUBLIC?
No. Companies can go public using a direct public
offering even when they do not have an underwriter
for their offering. A reverse merger is not required.

WHAT IS A DIRECT PUBLIC OFFERING?

Unlike
an
initial public offering
or
IPO,
direct public offering is an offering conducted by a
company on its own behalf without an underwriter.
Direct public offerings are often used in conjunction with
going public transactions.
In a registered direct public offering, the company files a
registration statement with the Securities & Exchange
Commission to register shares on its own behalf or on
behalf of its selling stockholders.

WHAT IS DTC ELIGIBILITY?

DTC is the only custodian of securities for its
participants, which include broker-dealers.
DTC is the only securities settlement provider in the U.S.
If an issuers stock is DTC eligible, DTC will hold an
inventory of free trading shares in street on deposit. These
free-trading shares are also known as the public float.
Without DTC eligibility, shares can only be publicly
traded if there is physical delivery of a stock certificate
and payment between a buyer and a seller.
Without DTC eligibility, it is almost impossible for a
public company to establish an active trading market in its
securities.

WHAT ARE THE DISTINCTIONS BETWEEN A SECURITIES

ACT & EXCHANGE ACT REGISTRATION STATEMENT?
Filing a registration statement under the Securities Act
of 1933 , such as on Form S-1 registers an offering of
securities. Shares registered under the Securities Act,
generally are not restricted securities.
Filing a registration statement under the Securities
Exchange Act registers a class of securities such as
common stock.
Registration under the Exchange Act does not register
a securities offering and it does not create
unrestricted securities.

For further information about thissecurities law Q & A, please

contactBrenda Hamilton,Securities Attorney at 101 Plaza
Real South, Suite 202 North, Boca Raton Florida,
(561) 416-8956, or info@securitieslawyer101.com. This
securities law blogpostis provided as a general informational
service
to
clients
and
friends
of
Hamilton & Associates Law Group, P.A .and should not be
construed as, and does not constitute legal advice on any
specific matter, nor does this message create an attorneyclient relationship. Please note that the prior results
discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Going Public Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com

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