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A traditional initial public
offering (IPO) is the sale of equity in a company, generally in the form
of shares of common stock, through an investment banking firm. These
shares usually trade on New
York stock exchange, American Stock Exchange or
Nasdaq.
The traditional IPO is more
suitable for established companies with sufficient financial strength
because fees and expenses could cost from several million dollars to tens
of millions of dollars.
Alternatively, many emerging and
established companies go public on OTCBB (Over The Counter Bulletin
Board) or Pink Sheets without
raising capital simultaneously.
The alternative method could be a
useful vehicle for companies that prefer to increase their values in the
public market before raising capital.
In other instances, companies choose the alternative methods
mainly because they plan to use their publicly traded stocks for
acquisitions.
The process for a company listed on
Pink Sheets is fast and relatively inexpensive because a Pink Sheets
listed company is not required to file registration statement and
periodic reports with the SEC.
A Reverse Merger into an OTCBB
shell takes less time to complete the going public process on OTCBB. However, the cost of a Reverse Merger
is usually higher due to the expense of purchasing an OTCBB shell
company.
To help companies structure their
going public transactions, we have developed a network of securities
attorneys, market makers, accountants and transfer agents to guide
companies through each stage of the process.
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