How to Go Public

While there are several potential routes when taking a company public and becoming trading on the OTC, at V Financial Group we focus on three methods through which you can achieve your goal:

  1. S-1 Registration Statement
  2. Regulation A+ Offering
  3. The Form 10 Shell Company

What is needed to go public?

  1. A Minimum of 35+ shareholders will be needed.
  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? My company has 35 shareholders, 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 shell company (*see definition) 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.