There are many ways to go public in the US and there are many different listings. The three major levels of listing are:
THE OTC PINK SHEETS: Often referred to as "pinks", These companies are listed by the National Quotation Bureau (NQB). Neither the NASD nor the SEC require Pink Sheet companies to maintain current reporting status nor undertake costly annual audits.
THE OTC BB: The OTC Bulletin Board is operated by the National Association of Securities Dealers (NASD) and requires that all companies whose stock is traded on the OTC Bulletin Board (or Nasdaq or Amex) maintain their current reporting status with the Securities and Exchange Commission (SEC), which includes current audited financial statements.
EXCHANGES: While the OTC PINK SHEETS and the OTC Bulletin Board are excellent stock markets, some clients are interested in trading on one of the more mature U.S. stock markets - Nasdaq Small-Cap, Nasdaq NMS, NYSE or AMEX. There are varying levels of qualification for each exchange including asset levels, number of shareholders, required Board level committees, and market capitalization. All exchanges require the company to maintain a current reporting status with the Securities and Exchange Commission (SEC), which includes current audited financial statements. There are also secondary stock exchanges such as the Boston Stock Exchange and Pacific Stock Exchange. We can assess whether your company qualifies for one of these stock exchanges and, if not, help your company grow and obtain a listing when it does meet the minimum requirements for such a listing. Typically, though, a client wishing to trade on one of these exchanges will need a minimum of $20 - 100 million in annual revenue and net profits of at least $2 million annually.
For a foreign corporation a listing on the US stock markets is a way to:
- Increase liquidity for the owners of the corporation by tapping into a liquid US market.
- Tap into the US capital market (the largest in the world) for expansion of business at home and internationally.
- Hedging against foreign currency - by diversifying your holdings into US dollars it is a way to hedge against the foreign markets volatility.
- Tap into the huge leverage possible on the US stock market as detailed in leverage point above. Often time foreign laws and exchanges do not permit the owners the huge leverage available on the US stock markets. (For example, being able to raise 100million dollars and keeping 70-80% control of the US corporation is not something you can do on all foreign exchanges.)
- Expand your business into the US and tap into strategic alliances-- US companies are more likely to do business (and do business on more favorable terms) with a US public corporation than a foreign corporation
- Tap into US and International personnel pools. Key US and INTERNATIONAL personnel are more available to a US public corporation.
- Tap into the international MERGER and ACQUISITION market. US and INTERNATIONAL businesses are more likely to become an acquisition or merger candidate for a US public corporation.