One overlooked individual in the process of taking a company public through reverse merger is the market maker. The market marker is critical especially if the company is going to be listed on OTC Bulletin Board or the NQB. Pink sheets.
Once the private company has decided to go public and has engage a consultant to advise management on the best way to proceed. And a determination has been made to do a reverse merger.
The first step is to identify an available corporate shell to purchase and perform the due diligence on the shell. The company decides to purchase the shell and proceeds with the reverse merger. The required Securities and Exchange Commission filing must be done.
The Securities and Exchange Commission upon reviewing the document and finding the document to be in order will approve the company's filing.
Now the consultant will recommend a market maker to sponsor the company with NASDAQ's Small Cap Market, OTC Bulletin Board or NQB Pink sheets. This is accomplished by filing form 15c211.
The broker dealer may not publish a quotation for any securities unless certain information concerning the issuer is available and the broker or dealer has a reasonable basis for believing that the information is accurate.
Some of those of those Securities and Exchange commission requirement are satisfied if:
(1) Securities Act registration statement (F-6, F-1) has been filed within 90 days.
(2) The issuer is complying with the filing requirements and the broker dealer has in its records the issuer's most recent annual report.
(3) The issuer is complying with rule 12g3-2(b)
(4) The broker dealer has on record information relating to the issuer, its securities, its business, products and facilities, management and financial statements and certain other require information.
The broker dealer is not compensated by company for this service causing the broker to absorb the cost involved in time spent and the regular monthly charges by the OTC. Bulletin Board for being a market maker in the company's stock.
The broker must stay on top of the filing and answer all questions pertinent to filing as requested by the OTC Bulletin Board. After approval the market maker must again file a request to publish a price for the securities of the issuer.
For a short period of time the broker dealer will be the sole market maker, being willing to buy and sell the stock for his own inventory, and assuming all the risk by himself but he also will be involved all the transactions that take place and stands to make all the profits as well.
After a period of time (usually 30 days) other market makers will be able to piggy back on the broker dealer who did the original filing and be able to publish a quotation. This provide more liquidity since a single market maker will not be responsible for all transactions.
Market Makers in Bulletin Board stocks must honor their bid and ask (bid the price they are willing to pay for stock, ask the price they are willing to sell stock) price. Below is a limited chart of the price and size mandated by the OTC.bb.
Price Minimum quote size 0-.50 5,000 0.51-1.00 2,500 1.01-10.00 500 10.01-100.00 200
The market maker role in assisting companies to go public is significant, he is the one who will be taking the risk and will reap the rewards depending on how well the securities trade.
Please visit our website for additional information in going public. www.genesiscorporateadvisors.com
Joseph D. Quinones, President of Genesis Corporate Advisors has spent over 25 years in the securities industry. In 1992 he founded JDQ Financial Group, Inc. and proceeded to build it up from a one man operation to the point where it employed many traders, advised numerous client and generate millions in revenues.
Are you a motivational speaker who consistently gets rave reviews... Read More
Business card size works well for invitations to special events.What... Read More
Paper Shredding Business Opportunities are blossoming up everywhere because in... Read More
Why should you always maintain a good report with a... Read More
Are the promoters and consultants destroying the market for Reverse... Read More
Most small businesses will not even try to advertise on... Read More
What are the best methods for keeping a good business... Read More
Your on-line success is based on your efforts and yours... Read More
Auto detailers are often asked to clean boats and detail... Read More
If you've been considering incorporating your small business, you've probably... Read More
Q: I really want to start my own business, but... Read More
We hear a lot of talk about junk mail nowadays.... Read More
Many times small businesses want to expand their businesses and... Read More
Have you ever heard the phrase, 'PREPONDERANCE OF PROOF'?I recently... Read More
Before you start a business we encourage you to prepare... Read More
$37.4 million funded from venture capital today. $86.4 million funded... Read More
Imagine that you have operated a successful franchise business for... Read More
At first glance, this topic may seem a little repetitive,... Read More
If you're starting your own business or currently work for... Read More
I believe the number one reason why a business will... Read More
Opening a carpet cleaning business is a great way to... Read More
One of the first things you will need to set... Read More
How many hours do you work a week? When was... Read More
Many small companies work very hard to get new accounts.... Read More
You may be in Mail Order, Direct Mail, or you... Read More
Rule 15C211Under SEC Rule 15C211, a U.S. securities broker or... Read More
Why does a good business relationship rely on having some... Read More
Congratulations, you are starting a small business! You are taking... Read More
Forget everything you've ever heard about the U.S. Small Business... Read More
What types of companies do you want to align yourself... Read More
Today required franchise disclosure documents are over 200 pages generally.... Read More
I am simply amazed at the problems some of my... Read More
Incorporation in Nevada has become an attractive option for savvy... Read More
In a perfect world, starting a small business would be... Read More
Self-cleaning glass has been talked about a lot, with such... Read More
When it comes to cost, how much can you afford... Read More
Every employee would like to earn as high a salary... Read More
Unfortunately for all buyers, each selling organization and their individual... Read More
If you interviewed business owners of failed businesses, a majority... Read More
Providing high quality customer service is a must for any... Read More
A recent survey indicated that clean Taxi Cabs Fleets have... Read More
If you are a motorcycle detailer and need to expand... Read More
The easiest way to lift profits is to cut the... Read More
Franchising companies often use Business Broker to help attain sales... Read More
Let me get right to the point. The single most... Read More
If you're serious about wanting to start a business, the... Read More
How far can you go based on your relationship with... Read More
Why are Chambers a good launching pad?Chambers provide you with... Read More
Quality control in franchising companies is paramount and all franchising... Read More
1. Don't Spend Too Much Time PlanningWhen you are entering... Read More
You'd like to go into business for yourself, and believe... Read More
Start thinking about buying an established business if you want... Read More
Many ventures are faced with the challenging task of raising... Read More
Car wash businesses are unique to other businesses. In fact... Read More
There is a continual trend we are seeing which I... Read More
Shopping for a franchise is easy if you know what... Read More
As a home business proprietor, you may already realize why... Read More
Back when I owned an inventory-based business, one of my... Read More
Tap these treasures of ideas. The best money you can... Read More
Many mobile car wash operators would like to add de-ionized... Read More
We all know how glorious those first warm days of... Read More
Here are a few tips on how to hand out... Read More
Do you spend every waking minute in your business? Do... Read More
The choice of financing is an important determinant of whether... Read More
What would happen if you decided to take an extended... Read More
Every company has a value proposition. That is a statement... Read More
Small Business |