Frequently Asked Questions
1. How long does it take to go public? Typically eight to nine months. It can be a little longer or faster, depending on the accounting/audit issues and how responsive management is to our inquiries.
2. How long does it take for the SEC to review a registration statement? Typically two to four months.
3. Can our company raise money while the SEC is reviewing our registration statement? You can’t offer debt or equity securities, but you can offer promissory notes that meet certain criteria.
4. Can our company raise money before or after the SEC reviews our registration statement? Yes.
5. Can your company raise money for us? No. We are not licensed to raise investment capital. Once public, we can make introductions to investment bankers we know, but we cannot be part of any negotiations and do not earn any fees for introductions.
6. What are the real costs of going public? If your company went public without our assistance, you would probably spend more than $80,000, between accounting, audit, legal, edgar, transfer agent, dtc, manual exemption and all the other fees associated with the process. Inclusive of our fees, it costs our clients less. Why? Because we handle the vast majority of document drafting ourselves, which significantly limits the amount our clients pay law firms. And, we have an efficient and effective team who work well under our supervision.
7. Do you provide investor relations services? No. We are a financial consulting firm. However, our founding managing member has meaningful investor relations experience and can provide you with general advice to design and implement a cost effective investor relations program.
8. What valuation do you think we will have? Our founding managing member was formerly a partner of an investment banking firm and completed research, analysis and evaluations on a wide range of companies. With enough information about your business, we can provide our opinion as to the likely valuation your company will have once traded.
9. Have you ever failed to take a client public? No. Every client which paid our fees has become publicly traded.
10. Do you do reverse mergers? In the past, our founding managing member was involved in several reverse mergers and can assist you in completing one. However, we do not recommend reverse mergers as a means to go public. There are many reasons, including costs and contingent liabilities. Presently, it costs between $450,000 and $500,000 to complete a reverse merger. The only advantage is saving a few months of time, but the very high cost and possibility of incurring contingent liabilities makes reverse mergers very unattractive.
11. What stock exchange do your clients trade on? We can assist clients with trading on any U.S. exchange as long as the client can satisfy the exchange requirements. Typically, our clients begin trading on the Non-NMS Quotation Service (formerly known as the OTC BB) and then can upgrade as they grow. While within our experience and capacity, we do not assist companies in trading on the Pink Sheets unless they are a reporting issuer.
More questions? Just give us a call at 516-509-8132.