We take emerging growth companies public in the US capital markets in the most cost effective and efficient manner. We assist with early- and late- stage financing by connecting them to networks of accredited investors, including high net-worth individuals, institutions, funds and lenders.
Our services, including all the necessary expenses and disbursements to third-party service providers such as legal, and registration fees, from the very first step to quotation of your company’s shares on the OTCQB and OTCBB, to after-market support and fund raising through private or public placements. In many instances this fee may be paid in full from initial private placements, so that the process could essentially be free to you.
We assist in a one-stop solution to going public in the following ways:
- Access to Capital:
By going public your company can access a substantial source of corporate funding. If the company needs to raise capital, it can sell shares. Access to capital is facilitated with a large shareholder base.
An initial private placement can bring immediate proceeds to a company. These funds may be used for a variety of purposes, including growth and expansion, retiring existing debt, corporate marketing and development, acquisition capital and covering the above “go-public” costs.
Your financing alternatives are increased as a public company. A combination of salary and stock can help you recruit, retain and incentivize key company employees.
With a quotation and market for the company’s stock, your company and its liquid shares can reward the company’s employees. A stock plan for employees demonstrates corporate good will and allows employees to become partial owners in the company and lead to increased productivity, morale and loyalty. This type of compensation is a way of connecting an employee’s financial future to the company’s success.
A public offering of stock can help a company gain prestige by creating a perception of stability. The image of your company may be improved. A company’s founders, co-founders and managers gain an enormous amount of personal prestige from being associated with a client that goes public. Prestige can be very helpful in recruiting key employees as well as marketing products and services. When sharing ownership with the public, you spread the company’s reputation and increase its business opportunities. By selling stock on an exchange your company can gain additional exposure and become better known. This exposure may lead to improved recognition and business operations. The public status can be leveraged when marketing goods and services. Often a company’s suppliers and consumers become shareholders, which may encourage continued or increased business. In this example, a public company could have a competitive advantage over a private enterprise. An IPO can indicate credibility to a company’s customers, which may lead to increased sales and a greater corporate profile. Once public, lenders and suppliers may perceive the company as a safer credit risk, enhancing the opportunities for favorable financing terms. Also, a public offering can create publicity that is effective when marketing your company.
- Mergers and Acquisitions:
Once a company goes public and the market for its stock is established, the stock can be considered as valuable as cash when acquiring other businesses. A successful IPO can have a dramatic effect on a company’s profile, perceived competitiveness and stability. This perception can lead to expanded business relationships and added confidence by the consumer. A valuation of a private company often reflects illiquidity. A successful public offering will increase a company’s valuation leading to a variety of opportunities for mergers and acquisitions. With the ability to raise additional capital by returning to the public markets for another offering, a public company is better able to finance a cash acquisition. A public company also has the advantage of using the market valuation when exchanging stock in an acquisition. SEC disclosure requirements offer merger candidates the assurance of shareholder scrutiny and accurate reporting of the financial condition or solvency of the public company. Using stock to acquire another company can be easier and less expensive than other methods. A public company’s corporate strategy is outlined by annual reports and marketing brochures which encourage corporate growth, development and merger activity.
- Exit Strategy:
One of the important benefits of a public offering is the fact that the company’s stock eventually becomes liquid, offering reward and financial freedom for the founders and employees. Officers, directors and controlling shareholders may have a ready market for their shares, which means that they can sell their interest at retirement, for diversification or for other reasons. An IPO also creates a public market for the stock, which provides a potential exit strategy and liquidity to the investors. A psychological sense of financial success can be an added benefit of going public. A public offering can enhance the personal net worth of a company’s shareholders. Even if a public company’s shareholders do not realize immediate profits, publicly traded stock can be used as collateral to secure loans
- Public Presence
A public offering of stock can generate prestige, publicity and visibility, all of which is effective when marketing your company. Public companies are more likely to receive the attention of major newspapers, magazines and periodicals than a private enterprise. The proper use of press releases, interviews or news stories can increase investor awareness, shareholder value and demand for the stock. A strong ad campaign coupled with media initiatives can potentially increase sales and revenue. The publicity received from a public offering encourages new business development and strategic alliances. Analyst reports and daily stock market tables contribute to the awareness of the consumer and financial community. A successful public offering can get your company’s story out to the world and open an opportunity for investors that are not suited for an investment in a private company. The publicity that a public offering brings can attract the attention of potential partners or merger candidates. Because the financial condition of a public company is subject to a higher scrutiny from the SEC reporting requirements, existing or future business relationships are strengthened. Tremendous exposure can be gained from a combination of radio, television, print and IPO publicity.
By going public, a company creates a public market for its stock. In general, stock in a public company is much more liquid than stock in a private enterprise. Liquidity is created for the investors, institutions, founders, owners and venture capital professionals.
Investors of the company may be able to buy or sell the stock more readily upon completion of the public offering. This liquidity can elevate the value of the corporation. The stock’s liquidity is contingent on a variety of factors including registration rights, lock-up restrictions and holding periods. A public company has greater opportunity to sell shares of stock to investors. Ownership of stock in a public company may help the company’s principals to eliminate personal guarantees. Liquidity can also provide an investor or company owner an exit strategy, portfolio diversity and flexibility of asset allocation.
Many companies use stock and stock option plans to attract and retain talented employees. It is increasingly common to recruit and compensate executives with a combination of salary and stock. Stock in a public company can be issued as a performance based reward or incentive. This reward could be deemed desirable if the stock has a public market. Stock can be instrumental in attracting and keeping key personnel. Also, certain tax advantages are a consideration when issuing stock to an employee. Generally, capital gains taxes are lower than ordinary income taxes. Owners and employees may have specific restrictions relating to the liquidity and sale of the stock. A public offering can create a market for the company’s stock. This market can result in liquidity and reward for the company’s employees. A stock plan for employees demonstrates corporate good will and allows employees to become partial owners in the company where they work. An allocation of ownership or division of equity can lead to increased productivity, morale and loyalty. This type of compensation is a way of connecting an employee’s financial future to the company’s success.
We provide you with a turnkey solution to for a fee of $75,000 USD.
The fee schedule is as follows:
- $25,000 USD on execution of engagement contract,
- $40,000 USD on filing the S-1 registration form, and
- $10,000 USD on effectiveness (SEC’s approval) of the S-1
Everything from the first step up to and including the S-1 is covered in our fees.
We will only require from you the following:
- Audited statements (We can assist and recommend an auditor for you at no additional charge)
- Shareholders (Ideally more than 30 shareholders are required. We will provide the necessary subscriptions agreements and other paperwork relating to this at no additional charge)
- Business plan (If you do not have one then we will prepare one for you for no additional charge)
Our fees are very competitive and we doubt that anyone else can provide the same value and same level of service at these prices.
We cannot include the audited statements in our fees as sometimes the audit itself can take more than 75 K depending on how many years the company needs the audit and how many transactions the company makes per month.
OUR COST ADVANATAGE
The Cost of Going Public With Us is Significantly Below the Usual Combined Costs of Going Public
Once quoted and trading, a public company on the OTCQB has a general resale value of in the range of US$200,000 to $350,000, with the latter being the cost if the company has free-trading shares. This resale value is 2.67 to 4.67 times greater than our cost to you. Should the business decide to go private, it may resell the public company’s listing for this intrinsic value. In that sense, a public company can generally be resold as a shell at a greater value than its cost, should that need arise. Essentially your going-public opportunity is financially risk-free.
How much does it cost to go public?
Audit Fees. the private company is required to have its financial statements for the last two fiscal years audited by an independent, registered accounting firm qualified with the Public Company Accounting Oversight Board (PCAOB), as well as have any stub periods since the end of its last fiscal year reviewed by the independent auditor. In situations where the company has not been in existence for two years, the company is required to provide audits and reviews for the period of time the corporation has been in existence. As mentioned above, these audit fees will vary company to company and audit firm to audit firm, depending on the audit’s size and complexity, the state of the accounting records and other factors.
Legal Fees. Under a Direct IPO, the legal fees are as follows due diligence and corporate clean-up (~$5,000), S-1 registration statement, including drafting, filing and responding to comments ($40,000), 15c2-11 filing with FINRA, including drafting and comment responses ($6,000), miscellaneous filings, such as Section 16 filings, Forms 13G/13D, etc. (~$5,000). Therefore, the legal fees are around $55,000-$60,000, if the company has an existing shareholder base of the required number of people. However, if the company does not have sufficient shareholders and needs to undertake an offering of its common stock to get additional shareholders the necessary private placement memorandum will cost an additional $15,000.
Other Fees. Obviously, for a company that goes public via a reverse merger there is likely going to be one additional large cost, and that is the cost of the shell. While prices for shells vary greatly, for most you can assume a price in the range of $300,000 – $400,000 in cash for a “clean” OTCBB shell
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