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Many private companies thatgo publicare opting for the listing on the
OTC Markets Pink Sheetsdue to the increased costs and more stringent
regulations associated with Securities and Exchange Commission (SEC)
reporting. Rule 15c2-11(SEC Rule 15c2-11) of the Securities Exchange
Act of 1934 (the Exchange Act) can be used by a private company
seeking togo publicwithout an SECregistration statementby asponsoring
market maker submitting a Form 211with the
Financial Industry Regulatory Authority(FINRA).
SubmittingForm 211
In order to use Rule 15c-211 togo public, the private company must locate a sponsoring
market maker to submit theForm 211application to FINRA on its behalf. FINRA may
render comments to theForm 211application which the sponsoring market maker and
private company must respond to.
Once FINRA is satisfied that the disclosures satisfy the requirements of Rule 15c2-11, it will
assign a trading symbol and the Market Maker can quote the companys securities. Once
this occurs, the securities of the private companygoing publicare quoted by the OTC
Markets on the OTC Pink Sheets. Once the sponsoring market maker has published
quotations for the companys securities for at least 30 days, other market makers can
publish quotations for the security.
The market maker chosen by the company to file theForm 211is not permitted to accept payment for his
or herservices.
Rule 15c-211 requires that the company have current public information available before the market maker
can quote the security. The information required in the Form 211 satisfies the current public information of
Rule 15c-211. Form 211requires, among other things, the following disclosures:
Detailed description of the issuers business, products/services offered, assets and sources of revenue;
Description of the companys facilities including the location, square footage and whether owned or
leased;
Identification of officers, directors and holders of more than 5% of the companys securities;
Certificate of Incorporation and bylaws including any amendments;
Current transfer agent generated shareholder list, indicating name and address of each shareholder, the
number of shares owned, date of share ownership, and whether the shares are restricted, control, or free
trading;
Description of the companys free-trading shareholder base, including a description of exemptions from
registration under the Securities Act;
Disclosure of whether the company has entered into any discussions or negotiations concerning a
potential merger or acquisition candidate;
Merger and/or consolidation agreements;
Partnership and/or joint venture agreements;
Unaudited financial statements for the last 2 fiscal years and interim periods;
Details of all private offerings including who solicited investors, how they were known to the solicitor,
and how many individuals were solicited, and whom did not purchase;
One full copy of the subscription agreement executed by each investor and copies of all checks from
subscribers or other proof of payment;
Copies of Form D filed with the SEC;
Description of all relationships among and between every shareholder and the issuer, its officers and
directors, and other shareholders;
the
the
Whether any officer or director of the issuer had any regulatory action taken against him/her by the
SEC, NASDAQ, NYSE or other securities-related regulatory agency and whether any officer or director of
the
issuer has been convicted of any felony charges within the last 5 years;
A detailed business plan, which includes a detailed chronological account of each and every step
issuer has taken in furtherance of its stated objective since inception;
the
A description of the steps the Company plans to take during the next year in furtherance of its business
plan, including the activities in which the Company plans to engage, the names of the persons who will conduct
these activities, and the expected dates of these activities;
A description of any future financing plan;
Any material agreements or letters of intent entered into by the Company;
Schedule of all material patents, trademarks, trade names, service marks, and copyrights; and
Legal opinion from companys securities lawyer as to tradability of the free trading shares.
Conclusion
For further information about thissecurities law blogpost, please contactBrenda Hamilton,
Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida,(561) 416-8956, by
email atinfo@securitieslawyer101.com.Thissecurities law blogpostis provided as a general
informational service to clients and friends ofHamilton & Associates Law Groupand 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
aboutgoing publicand the rules and regulations affecting the use ofRule 144, Form
8K,crowdfunding,FINRA Rule 6490,Rule 506 private placementofferings and memorandums,
Regulation A,Rule 504 offerings, SEC reporting requirements, SECregistration statements
onForm S-1,IPOs,OTC Pink Sheetlistings,Form 10OTCBB andOTC Marketsdisclosure
requirements,DTC Chills, Global Locks,reverse mergers, public shells,direct public offerings
and direct public offerings please contact Hamilton and Associates at(561) 416-8956or
info@securitieslawyer101.com. Please note that the prior results discussed herein do not
guarantee similar outcomes.
Hamilton & Associates| Securities Lawyers
Brenda Hamilton, Securities 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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