Q: How do I sell stock to the public?

A: Your stock must either be registered under the SEC’s 1933 Securities Act or it must be exempt from registration. Registration requires detailed disclosure. Preparing the document can be time consuming, complex, and costly.

An alternative is an offering exempt from registration such as an offering under Regulation D Rule 504, 505 or 506. Under a Regulation D Rule 504 offering, only $1,000,000 can be raised in a 12-month period, but the stock could be "freely tradable" under certain conditions. This means it can be resold without restriction.

Q: How do we develop a public market in our stock?

A: First, you must find a market maker to sponsor you and then submit a complete disclosure package to them. This disclosure package includes information required under Rule 15c2-11 of the Securities Act. Additionally, each market maker has its own compliance procedures prior to submitting an application for trading in your securities. Once submitted, the NASD will respond with comments and requests for additional information. After they are satisfied that certain disclosure requirements have been met, the securities are cleared for trading and a stock symbol is assigned. The initial trading price is then set by the market. Because of the differences in each company’s information and the fluctuations in project flow at the NASD, the time frame for which trading will be initiated varies substantially. Once your securities are eligible for trading, other market makers can post bids and offers on your securities within 30 days of the initial approval without resubmitting another application. Because of our relationships in the industry, we may be able to introduce you to market makers.

Q: Do you help companies raise money?

A: No. We are not a broker/dealer as defined under the Securities Act. We do not employ or contract a team of brokers that will sell a client’s stock. We can, however, help bring all the parties together and make the entire transaction as comfortable, efficient, and inexpensive as possible. Because of our experience and contacts in the industry, we will be happy to make introductions when appropriate.

Q: Once I’m trading, will I be on NASDAQ?

A: You will be most likely begin trading on the National Quotation Bureau Pink Sheets or on the NASD (National Association of Securities Dealers) Over-the-Counter Bulletin Board market. Then, depending on your qualifications, you may apply for listing on the New York Stock Exchange, the American Stock Exchange or the NASDAQ market. There are two levels of the NASDAQ markets, each with different requirements. The NASDAQ National Market System has the highest standards. This is where you will find companies such as Microsoft and Apple. The next standard is the NASDAQ SmallCap market. The assets and longevity of a company will determine the appropriate NASDAQ standard.

Q: Can I raise capital by reverse merging into a shell?

A: A reverse merger into a public shell corporation by itself does not raise any money for the company. However, since the process leaves the private company with a base of shareholders that can freely trade their stock, a market price can be established by market makers. This market adds liquidity to the company. Added liquidity commands a premium in the marketplace. As a result, public companies tend to have higher market values than private companies in the same industry. This liquidity and higher value allows the company to attract investors and raise capital more easily and with less dilution.