XBRL Interactive Data l Securitis Lawyer 101

The use of eXtensible Business Reporting Language (XBRL) interactive data is intended to improve the accessibility of financial information to investors by making the information inexpensive and easier to use.  XBRL interactive data uses a standardized set of tags to consistently identify data in embedded text.  Issuers must identify each piece of data in its financial statements according to a standard list of tags assigned to the particular type of data.  Using XBRL, the issuer must “tag” financial information so that software applications will automatically recognize the information.

By tagging the information, investors and shareholders are able to locate, download and

Ask Go Public 101 l OTC Pink Sheet l Q & A

Q. What are the benefits of  listing on the OTCMarkets OTC Pink Sheets?

 

A.  There are a couple of benefits for companies opting to list on the OTC Pink Sheets.

Pink Sheet listings are much less expensive and the disclosure requriements are less stringent than a listing on the OTCMarkets OTCQB because audited financial statements are not required.  Despite that audited financial statements are not required, issuers who publish the information required by the OTCMarkets Pink Sheet Disclosure Guideslines provide transparency to investors and comply with SEC Rule 15c-211.

 

Sponsoring Market Makers And Going Public

The last step in going public transactions is most often obtaining a stock trading or ticker symbol from the Financial Industry Regulatory Authority (“FINRA”). For a company to obtain a ticker, a market maker must submit a Form 211 on the issuer’s behalf to the Finance Industry Regulatory Authority (“FINRA”). This last step is required of all companies including those filing Form S-1 registration statements with the SEC.

Only a Market Maker can submit a Form 211 to obtain a

Seed Stockholders In Going Public Matters

The going public process involves a number of steps that vary depending on the characteristics of the private company wishing to go public, and whether it will become a Securities and Exchange Commission (“SEC”) reporting issuer.

All companies seeking public company status must meet certain requirements in order for their securities to be publicly traded. One requirement is that the issuer obtain sufficient shareholders to establish a trading market. These initial shareholders are known as “Seed Shareholders”.

Sponsoring Market Makers In Going Public Transactions

One step in going public transactions is obtaining a stock trading or ticker symbol from theFinancial Industry Regulatory Authority (“FINRA”). For a company to obtain a ticker, a sponsoring market maker must submit an application on Form 211 on the issuer’s behalf to the FINRA.

Sponsoring markets makers have become one of the  most important players in the going public process because they are the only ones who can apply for a ticker symbol.

Market Maker Registration

Research Analysts and Underwriters After the JOBS Act l Going Public 101 Blog

On September 28, 2012, the Financial Industry Regulatory Authority, Inc. (“FINRA”) proposed rule changes to the Securities and Exchange Commission (the “SEC”), for Rule 2711. The proposals are pursuant to the requirements of the Jumpstart Our Business Startups Act (the “JOBS Act“).

Analyst Communications

NASD Rule 2711(c)(4) and NYSE Rule 472(b)(5) presently prohibit research analysts from participating in communications with companies for the purpose of soliciting investment banking business or pitches aimed at such business.

FINRA Issues Crowdfunding Portal Proposals

On October 25, 2013, FINRA announced the release a set of proposed funding portal rules and forms for equity crowdfunding.   Funding portals that engage in crowdfunding on behalf of issuers relying on the JOBS Act’s crowdfunding exemption must register with the SEC and become a member of a national securities association.

FINRA’s proposals consist of rules and related

Shelf Registration Statements in Going Public Transactions

A shelf registration statement allows an issuer to register a public offering even when there is no present intention to sell all the securities being registered. Shelf registrations are often used in going public transactions by issuers registering securities on Form S-1.

Private companies seeking public company status can use a Form S-1 shelf registration to register multiple securities offerings at the same time on a single registration statement. In going public transactions, often issuers sell shares in reliance upon Rule 506 of Regulation D to raise seed capital, and then register those shares by filing an S-1.

Form 10 Registration Statements and Alternative Going Public Structures

In going public transactions most issues file Form S-1 registration statements pursuant to the Securities Act of 1933, as amended.  In some circumstances, a Form 10 registration statement may be used. Form 10 is aRegistration Statement used to register a class of securities pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“Exchange Act”).

OTCMarkets OTCQB

Many issuers seeking to go public are opting to list on the OTCMarkets OTCQB. The OTCMarkets Group operates an electronic inter-dealer quotation system called OTC Link. OTCMarkets ranks issuers in tiers; each issuer’s rank depends upon the amount of disclosure provided.

Companies using registration statements followed by Rule 15c2-11 applications to go public qualify for the “OTCQB” tier. The QTCQB tier is only available to issuers who file reports with the SEC. These issuers are not required to provide additional disclosures to the OTCMarkets.

Listing On the OTC Markets Tiers

Many private companies seeking to go public are opting to list on the OTCMarkets OTCQB.   The

OTCMarkets Group operates an electronic inter-dealer quotation system called OTC Link. OTCMarkets ranks issuers in tiers; each issuer’s rank depends upon the amount of disclosure provided.

 Issuers using registration statements followed by Rule 15c2-11 applications to go public qualify for the “OTCQB” tier. The QTCQB tier is only available to issuers who file reports with the SEC. These issuers are not required to provide additional disclosures to the OTCMarkets.

In order for a private company to go public on the OTCQB, it must become anSEC reporting issuer.  Once the company is reporting, it can then obtain its ticker symbol assignment from

DTC Chills & Global Lock Solutions

The Depository Trust and Clear Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC’s subsidiary, the Depository Trust Company (“DTC”) was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions.

Not all securities are eligible to be settled through DTC and issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy these criteria in order to be DTC eligible, including Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers who go public direct

Seed Stockholders l Going Public Bootcamp

The going public process involves a number of steps that vary depending on the characteristics of the private company wishing to go public, and whether it will become a Securities and Exchange Commission (“SEC”) reporting issuer.

All companies seeking public company status must meet certain requirements in order for their securities to be publicly traded. One requirement is that the issuer obtain sufficient shareholders to establish a trading market.

OTC Pink Sheet l Question and Answer

Q. What are the benefits of  listing on the OTCMarkets OTC Pink Sheets?

A.  There are a couple of benefits for companies opting to list on the OTC Pink Sheets.

Pink Sheet listings are much less expensive and the disclosure requriements are less stringent than a listing on the OTCMarkets OTCQB because audited financial statements are not required.  Despite that audited financial statements are not required, issuers who publish the information required by the OTCMarkets Pink Sheet Disclosure Guideslines provide transparency to investors and comply with SEC Rule 15c-211.