Enter the U.S. capital markets

– Alternative Public Offerings (“APOs”) and Direct Public Offerings
– Reverse mergers
– Form 10 IPOs
– Conventional initial public offerings (“IPOs”)
– Regulation A+ offerings
– Private investment in public equities (“PIPEs”), resale registrations
– Bridge financings
– Regulation D and regulation S private placements
– Bank financings

– Access to public markets.
– Liquidity for existing investors – exit strategy
– Use of stock as currency for growth through acquisitions.
– Public company offerings typically valued higher than private company offerings, without the list of control commonplace in private equity transactions.
– Higher confidence in public company management.
– Public visibility.

– A private company acquires control of, merges with and becomes an operating subsidiary of a public company (“shell”), concurrently with a capital raise.
– company becomes the officers and directors of the public company.
– A “Super 8-K” disclosure document, including two year audited financial statements of the private company, is filed with the SEC within four business days after the merger closing.
– Shares sold to raise capital are either registered for resale or become free trading 12 months following the closing of the APO under Rule 144.
– Shares typically start trading on the OTC Markets rather than the Nasdaq or the NYSE Amex.

– No dependency on (often nonexistent) IPO market windows.
– Smaller companies gain access to the public capital markets.
– Faster and less expensive than an IPO.
– Access to growth capital often a component of an APO.
– Advisors and management set company valuation.
Less management distractions during going public process.
– Rule 144 waiting period enables orderly market.
– APOs using the OTC Markets allow for migration onto Nasdaq or the NYSE Amex thereby alleviating burden of initial exchange listing requirements at time of going public.