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What Is A Customized Registration Statement?
The "customized registration statement" offers yet another method of going public. In the
customized registration statement, a privately held company becomes a public company by
going through a registration that can be customized. The stock is registered with the SEC.
Once the registration statement is effective, you fulfill any other requirements and a market
maker agrees and gets approval to make a market in your stock, a trading market develops
in the stock of the once private company, and your stock now becomes public.
The customized registration statement differs from a reverse merger in the following ways:
The private company may structure the new public company to meet its particular needs such as
amount and classes of stock, warrants, etc. A reverse merger requires that the private company accept the
structure of the existing company or change it by shareholder vote, including outside shareholders.
The customized registration statement allows you to become public and do a secondary public
offering later on, which typically occurs at a cost more desirable than an IPO. Principles and
shareholders of the private company can include their stock ownership in the registration statement.
This should allow them to then sell their stock in the public market, subject to the volume limitations of Rule 144.
If the private company is an overseas company, it may not want to become an American company
as it would in a reverse merger into a shell. A customized registration statement is a solution to that problem.
The overseas company can have their securities traded in the United States without requiring them to
become a U.S. company or a U.S. subsidiary.
A domestic company may also prefer a customized registration statement to a reverse merger with a shell if
it wants "custom features" which it does not find in a shell; e.g., two classes of stock owned by shareholders
of the private company and/or warrants. Once a company goes public via a reverse merger or a customized
registration statement, the financial markets hold the following future prospects for the new public corporation:
- The market value of a public company is often substantially higher than a private company with the same
structure in the same industry.
- Raising capital is easier to for public companies because of stock "liquidity".
The market value of the public company's stock serves as a benchmark for the
price of a subsequent public or private securities offering.
- Acquisitions of other companies can be made with stock since stock of a "public
company" is viewed as currency for mergers and acquisitions.
A small company can usually afford to go public via a custom registration statement.
The cost is significantly lower compared to acquiring or merging with a public shell and
is spread out over six to nine months. We have a program to fit every
company's need. We will design an easy program that suits your needs and assist your
every effort to get your stock trading on the NASDAQ Over-the-Counter Bulletin Board.
Read SEC Regulations for primary public or private offerings by issuing companies.
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