Hello,
No, we're not "going public" like a certain golfer.
This is the term that is used for a CORPORATION becoming part of the STOCK MARKET and allowing PUBLIC TRADE of shares in the company, to be sold to anyone as STOCK so the CORPORATION can raise CAPITAL for EXPANSION. Unlike becoming a Corporation, it is a complex process so bear with me.
One of the first decisions the CEO (chief executive officer) makes when he thinks it is time to GO PUBLIC is to hire a MARKET KNOWLEDGEABLE CFO (chief financial officer) in addition to his COO (chief operating officer) because company finances are a big hurdle in the GOING PUBLIC PROCESS.
Then he and the CFO have to choose one of 3 methods of GOING PUBLIC (we'll only cover one here). They choose SELF UNDERWRITING (GO PUBLIC DIRECT). The other two methods are an IPO (INITIAL PUBLIC OFFERING) or a PUBLIC SHELL (Reverse merger). The latter 2 choices require much more funding than the "Up Yours" corporation has currently.
GOING PUBLIC DIRECT allows the company to file directly with the SEC (Securities and Trade Commission) a "SELLING STOCKHOLDER REGISTRATION STATEMENT" (Shares you have already sold) or a "DIRECT PUBLIC OFFERING" (DPO is for shares the Corporation PLANS to sell publicly).
The CEO (chief financial officer), CFO (chief financial officer), the COO (chief operations officer)and a team of attorneys confer and choose the DPO (direct public offering) and contact a FINRA broker (Financial Institution Regulatory Authority) who will file a form to secure their ticker symbol.
Mind you, having a knowledgeable team of professionals is necessary to clear an SEC (SECURITIES TRADE COMMISSION) filing in the GO PUBLIC DIRECT transaction. Although the SEC does not do merit reviews, it requires accurate company and financial disclosures. Properly handled, you will progress in attaining your goal in three to four months. The SEC by the way does not judge stocks as potential losers or winners--only that they are what they claim to be. In other words "a spade is a spade" but that doesn't mean being a spade will make it a winner or loser in a card game.
FINRA (Financial Institution Regulatory Authority) follows the SEC ruling with a review process to make sure that due diligence has been proved and shown. That's when it starts getting really complicated.
The CEO has the attorneys prepare a filing (an SEC REGISTRATION statement) which gives the "UP YOURS" CORPORATION what is called FREE TRADING STOCK and makes the CORPORATION a mandatory SEC REPORTING COMPANY. The filing will include "DUE DILIGENCE" questions for A DISCLOSURE that includes: background on all officers and directors; material contracts and agreements; a business management plan; and an Internet address for the Corporation's website. The finished form is filed with the SEC for review.
The attorneys and the CFO (chief financial officer) will also draft and file with the SEC a complex corporate financial statement. There is a final clarification step to explain any footnotes in a section of the filing draft called "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION" to explain variations and differing numbers in differing time periods.
The SEC has a filing system called EDGAR-"ization" the (ELECTRONIC DATA GATHERING, ANALYSIS AND RETRIEVAL SYSTEM),a monster software program to which the REGISTRATION STATEMENT has to be converted.
Once filed, it is reviewed by the SEC who focus on DISCLOSURE and financial statements being sure they meet the rules and regulations. The SEC does not block registrations BUT CAN DELAY them by 30 days at a time. After the SEC clears the filing, FINRA (FINANCIAL INDUSTRY REGULATORY AUTHORITY) requires another disclosure form. The "Up Yours" SEC process has been facilitated by experienced professionals so the filing should take about a month to complete and clear.
If the professional team goofed off (God forbid) somehow in the procedure, the SEC staff would issue a deficiency letter (COMMENT LETTER). The company would be required to file an amendment response addressing the issue(s). Another 30 days can produce another COMMENT--ad infinitum (Latin for a recurring pain in the "A double scribble". However, most problem filings clear after several more COMMENTS. It pays to do it right with the right staff to keep the process from slowing down. Thirty days for each deficiency can make the expected three to four month process extend unbearably.
DO YOU FEEL LUCKY, CHAMP? Right! The SEC has a REVIEW LOTTERY and can elect to not review your FILING and clear it in 15 days OR LESS! Count on your Las Vegas experience-the odds are against you!
The SEC before, during and after the Corporation's filing can be very touchy about what the CEO does. The SEC does not want to want the CEO blabbing publicly in advance no matter how excited he is about GOING PUBLIC. During what they call the QUIET PERIOD the CEO is not under a "gag order" exactly(?) and can answer UNSOLICITED questions by the the press. Beware the word: UNSOLICITED. It can be a CEO Snap trap by a rising upstart in the Corporation who calls the press to get the CEO to do an article.
The CEO is responsible, no matter who does the deed, and the SEC will stop the review process for as long as they DWP (damn well please) and no amount of tears will wash away their hurt feelings. How could you have betrayed them??? And unless you've got a long history of press releases well before the Corporation filed, the CEO needs to keep his PR (PUBLIC RELATIONS) staff on a short leash. The CEO can engage in "bedtime talking" during the QUIET PERIOD but LEGAL TALKING can lead to "trash talking" paraphrases in violation of your filing.
The CEO should probably take this SEC QUIET PERIOD to go on vacation to a FOREIGN destination since RAISING MONEY in the U.S.A. during the QUIET PERIOD is a major NO NO. The SEC says you only need enough money to get you through the process and says: "the filing of your REGISTRATION STATEMENT constitutes general advertising and solicitation and that private placements during the time your filing is PENDING are integrated with your public offering....."so raising money is off limits IN THIS COUNTRY during the review. The SEC has a real sensitivity bump on this.
However, if our CEO goes on vacation away from our shores and provides a PROSPECTUS (under certain SEC stringent rules) he can pitch his Corporation's shares. It's also very tricky if the CEO (OR INSIDERS) sell large portions of stock anywhere because investors will worry about creating selling pressure and driving the stock price down. The SEC has a point there!
Our CEO is worth his bonus. The SEC has accepted his filing without delay and in the next post we'll discuss how the Corporation handles FINRA (THE FINANCIAL INDUSTRY REGULATORY AUTHORITY), the largest non-government regulator (we still have ONE non-government body) for all securities firms in the USA. FINRA watches over approximately 5000 brokerage firms. Probably less now than before the 2008-10depression (or you may prefer the term recession if you've been dozing). By the way I think FINRA should be answering a lot more to Wall St. because it seems they were snoozing pretty heavily before the bust.
Cheers, Connie
No, we're not "going public" like a certain golfer.
This is the term that is used for a CORPORATION becoming part of the STOCK MARKET and allowing PUBLIC TRADE of shares in the company, to be sold to anyone as STOCK so the CORPORATION can raise CAPITAL for EXPANSION. Unlike becoming a Corporation, it is a complex process so bear with me.
One of the first decisions the CEO (chief executive officer) makes when he thinks it is time to GO PUBLIC is to hire a MARKET KNOWLEDGEABLE CFO (chief financial officer) in addition to his COO (chief operating officer) because company finances are a big hurdle in the GOING PUBLIC PROCESS.
Then he and the CFO have to choose one of 3 methods of GOING PUBLIC (we'll only cover one here). They choose SELF UNDERWRITING (GO PUBLIC DIRECT). The other two methods are an IPO (INITIAL PUBLIC OFFERING) or a PUBLIC SHELL (Reverse merger). The latter 2 choices require much more funding than the "Up Yours" corporation has currently.
GOING PUBLIC DIRECT allows the company to file directly with the SEC (Securities and Trade Commission) a "SELLING STOCKHOLDER REGISTRATION STATEMENT" (Shares you have already sold) or a "DIRECT PUBLIC OFFERING" (DPO is for shares the Corporation PLANS to sell publicly).
The CEO (chief financial officer), CFO (chief financial officer), the COO (chief operations officer)and a team of attorneys confer and choose the DPO (direct public offering) and contact a FINRA broker (Financial Institution Regulatory Authority) who will file a form to secure their ticker symbol.
Mind you, having a knowledgeable team of professionals is necessary to clear an SEC (SECURITIES TRADE COMMISSION) filing in the GO PUBLIC DIRECT transaction. Although the SEC does not do merit reviews, it requires accurate company and financial disclosures. Properly handled, you will progress in attaining your goal in three to four months. The SEC by the way does not judge stocks as potential losers or winners--only that they are what they claim to be. In other words "a spade is a spade" but that doesn't mean being a spade will make it a winner or loser in a card game.
FINRA (Financial Institution Regulatory Authority) follows the SEC ruling with a review process to make sure that due diligence has been proved and shown. That's when it starts getting really complicated.
The CEO has the attorneys prepare a filing (an SEC REGISTRATION statement) which gives the "UP YOURS" CORPORATION what is called FREE TRADING STOCK and makes the CORPORATION a mandatory SEC REPORTING COMPANY. The filing will include "DUE DILIGENCE" questions for A DISCLOSURE that includes: background on all officers and directors; material contracts and agreements; a business management plan; and an Internet address for the Corporation's website. The finished form is filed with the SEC for review.
The attorneys and the CFO (chief financial officer) will also draft and file with the SEC a complex corporate financial statement. There is a final clarification step to explain any footnotes in a section of the filing draft called "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION" to explain variations and differing numbers in differing time periods.
The SEC has a filing system called EDGAR-"ization" the (ELECTRONIC DATA GATHERING, ANALYSIS AND RETRIEVAL SYSTEM),a monster software program to which the REGISTRATION STATEMENT has to be converted.
Once filed, it is reviewed by the SEC who focus on DISCLOSURE and financial statements being sure they meet the rules and regulations. The SEC does not block registrations BUT CAN DELAY them by 30 days at a time. After the SEC clears the filing, FINRA (FINANCIAL INDUSTRY REGULATORY AUTHORITY) requires another disclosure form. The "Up Yours" SEC process has been facilitated by experienced professionals so the filing should take about a month to complete and clear.
If the professional team goofed off (God forbid) somehow in the procedure, the SEC staff would issue a deficiency letter (COMMENT LETTER). The company would be required to file an amendment response addressing the issue(s). Another 30 days can produce another COMMENT--ad infinitum (Latin for a recurring pain in the "A double scribble". However, most problem filings clear after several more COMMENTS. It pays to do it right with the right staff to keep the process from slowing down. Thirty days for each deficiency can make the expected three to four month process extend unbearably.
DO YOU FEEL LUCKY, CHAMP? Right! The SEC has a REVIEW LOTTERY and can elect to not review your FILING and clear it in 15 days OR LESS! Count on your Las Vegas experience-the odds are against you!
The SEC before, during and after the Corporation's filing can be very touchy about what the CEO does. The SEC does not want to want the CEO blabbing publicly in advance no matter how excited he is about GOING PUBLIC. During what they call the QUIET PERIOD the CEO is not under a "gag order" exactly(?) and can answer UNSOLICITED questions by the the press. Beware the word: UNSOLICITED. It can be a CEO Snap trap by a rising upstart in the Corporation who calls the press to get the CEO to do an article.
The CEO is responsible, no matter who does the deed, and the SEC will stop the review process for as long as they DWP (damn well please) and no amount of tears will wash away their hurt feelings. How could you have betrayed them??? And unless you've got a long history of press releases well before the Corporation filed, the CEO needs to keep his PR (PUBLIC RELATIONS) staff on a short leash. The CEO can engage in "bedtime talking" during the QUIET PERIOD but LEGAL TALKING can lead to "trash talking" paraphrases in violation of your filing.
The CEO should probably take this SEC QUIET PERIOD to go on vacation to a FOREIGN destination since RAISING MONEY in the U.S.A. during the QUIET PERIOD is a major NO NO. The SEC says you only need enough money to get you through the process and says: "the filing of your REGISTRATION STATEMENT constitutes general advertising and solicitation and that private placements during the time your filing is PENDING are integrated with your public offering....."so raising money is off limits IN THIS COUNTRY during the review. The SEC has a real sensitivity bump on this.
However, if our CEO goes on vacation away from our shores and provides a PROSPECTUS (under certain SEC stringent rules) he can pitch his Corporation's shares. It's also very tricky if the CEO (OR INSIDERS) sell large portions of stock anywhere because investors will worry about creating selling pressure and driving the stock price down. The SEC has a point there!
Our CEO is worth his bonus. The SEC has accepted his filing without delay and in the next post we'll discuss how the Corporation handles FINRA (THE FINANCIAL INDUSTRY REGULATORY AUTHORITY), the largest non-government regulator (we still have ONE non-government body) for all securities firms in the USA. FINRA watches over approximately 5000 brokerage firms. Probably less now than before the 2008-10depression (or you may prefer the term recession if you've been dozing). By the way I think FINRA should be answering a lot more to Wall St. because it seems they were snoozing pretty heavily before the bust.
Cheers, Connie
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