The Cost Of Going Public Within The United States
Firstly, there are various markets. There are the Pinksheet markets, the Over-the-Counter Bulletin Board Market, OTCQX, Nasdaq Small Cap, Nasdaq.
Pinksheets
The Pinksheets rarely have anyone list directly onto them. The reason is that most market makers who require sponsoring the project are shy with regards to sponsoring Pinksheets because they are associated to an unregulated market. However, many large firms started as Pinksheet companies that they reverse merged into. Many major companies have started off as reverse mergers into Pinksheet companies. A Pinksheet Shell for sale would be roughly $150,000. Some pinksheet shells sell for as little as $50,000. Greysheets which means the company doesn’t have a market maker anymore sell for as little as $10,000 but have no tradeable value like a Pinksheet that has a market maker. Therefore, to go public with a Pinksheet shell you are looking at $150,000 cost of going public. If a Pinksheet shell is something that interests your firm, contact info@otclistings.com subject Pinksheet.
OTCBB Listings – OTCBB Shells – OTCBB Markets
Listing an OTCBB Company – Process and Costs
- In the event of building an OTCBB Company the general costs from our experience is in stages:
- retainer to prepare and submit registration statement to Company’s Edgarizer for initial filing
- retainer to draft all correspondence with The SEC including all amendments to the registration statement S1 until SEC deems “Effective”
- retainer for preparation and submission of 15c211 and draft all correspondence from FINRA
- payment upon receipt of trading symbol.
- incidental costs such as auditor, legal, filing fees, etc.
Although several companies advertise the low cost abilities to list a company on the OTCBB, we have not seen a company properly built, with a symbol, dtc eligible and trading for under $65k USD, on average the total costs including market makers, DTC, auditors, legal, consulting, and incidentals often run up as high as $75,000 USD. The process can take 6-18 months depending on the company and complexity of their filings, the state and liability of agreements they have signed with suppliers, financers, and service providers, and the overall structure of the company. If you are looking to list a company on the OTCBB from beginning to end, contact info@otclistings.com subject OTC Listings Services.
Buying an OTCBB Shell – The Cost of An OTCBB
On average an OTCBB company that is for sale supplies up to 99% of the company post merger, often this can be brought as close to 100% as possible. Some are 100% but legally this is a transaction that must involve more than one buyer or the company will be deemed no longer public if all shares are in the hands of one purchaser. Needless to say we will call this type of OTCBB a fully deliverable OTCBB for sale. A fully deliverable OTCBB company that is DTC eligible, which means the stock can be traded through a brokerage firm and cleared is the key. As purchasing a non-DTC eligible company means the company cannot trade! A DTC Eligible fully deliverable OTCBB company with no liabilities would sell for $400K USD to $525K USD depending on the structure, the filings, and the business before which would allow the firm to operate without being deemed a shell. For information on how to find and acquire a fully deliverable DTC eligible OTCBB shell for sale, contact info@otclistings.com subject Fully deliverable DTC eligible OTCBB.
A fully deliverable OTCBB shell that is not DTC eligible, which means it has a symbol but cannot trade yet, costs $365,000 to $400,000. This is mainly for the value of full delivery and a symbol. $5,000 of consulting generally needs to be put into place to get this type of firm eligible. If you are looking for a quick application to the DTC for your non-eligible entity we can help you apply and achieve eligibility. If you are looking to buy a fully deliverable OTC Shell that is not DTC eligible, contact info@otclistings.com Fully Deliverable OTCBB.
Other OTCBB Shell companies range from having 95% deliverable to 50% deliverable. These therefore range from $220,000 USD to $325,000 USD in the current markets. These companies may come with liabilities attached in addition to the dilution of shares. If you are interested in purchasing one of these firms, contact info@otclistings.com and we can direct you to firms looking to sell their business.
Reverse Merger into an OTCBB company costs generally a percentage of the incoming assets and on occasion firms will cover immediate costs and overheads that may be in place, such as legal, accounting, and other such ongoing concerns.
IPO Listings in the United States
Costs of an IPO truly depend on the brokerage firm you work with, which includes the size of the underwriting, and their ability to list and fulfill the financing. However, this method varies greatly based on the history of the private company and the complexity of the deal. Often there are several financing parties involved with this project and it is a huge undertaking of paperwork that on average can cost over $1,000,000 to achieve.
Example of IPO costs in the United States as quoted by another online source include:
Pre-IPO Costs – $300,000
Legal Costs – $175,000
Accounting – $80,000
Printing & Mailing – $100,000
Translation – $30,000
Market Prep Costs – $90,000
Investment Bankers – $50,000
Consultants – $50,000
Moody’s or S&P – $6,000
Blue Sky Fees – $20,000 (California only)
Transfer Agent – $2,000
Mgnt. & Admin. – $200,000
SEC Filing Fee – $5,000
Taxes – $15,000 (Estimated)
Total – $1,123,000
Underwriters
Underwriters can also take up to 18% on the project itself.
- Non accountable Expense 3%
- Accountable Expense 5%
- Discount 10%
“The Company insiders are often required to supply IPO buyers. The norm is the company insiders’ supply 50% of the IPO buyers. The writer of this article has seen ranges of required buying from10% to over 100%.”
Listing a Company on The OTCBB as a Best Option
OTC Listings can package the entire registration and listing service for you as discussed in the article above as the lowest cost variable to going public on the OTC market. This keeps your cost lower and saves you time and money with regards to costs of individual parts. Because we take several companies public we keep the costs lower and manageable for your firm.
A US company can incorporate a subsidiary within the UK or Europe for example that can easily register their shares into their local trading platforms. This new foreign holding company can own the US firm. Within 3-6 weeks of incorporation, this company can be listed on the Frankfurt Stock Exchange using www.fselistings.com.
Once the firm is listed, it can begin raising capital in Frankfurt with roadshows and tradeshows built to attract financing in Europe and organized by your agency, FSE Listings.
Then, as a non-American company, going public in the United States is less costly than any U.S. Domestic company to become a U.S. public company in America, the savings are in legal costs, responsibilities for filings, no annual shareholders report or meeting. You start with a foreign firm with capital, and end up with a domestic listing and all the time in the world to get there. If you are looking for the two most cost effective ways to list, the Frankfurt Listing costs 60,000 – 100,000 euro to list and takes 3-6 weeks. A dual listing back to the United States costs $40,000 and takes about 3-6 months. In actual fact you can list a company on Frankfurt quickly, raise capital, and list back into the US for less than the cost of a Pinksheet shell company.
If you are interested in the Frankfurt Listing process contact info@fselistings.com
Historically, the Over-the-Counter and Over-the-Counter Bulletin Board (OTCBB) are the easiest and cheapest places to list your shares. The Frankfurt Stock Exchange is on equal footing in cost, but you can list on the Frankfurt Stock Exchange faster! (Less than two months)
Frankfurt Stock Exchange shells (www.frankfurtshells.com) sell for on average 100,000 euro to 200,000 euro depending on structure, deliverability, and filings. If a Frankfurt shell interests you, contact info@fselistings.com subject word FSE Shell.
This article is the copy write material of FSE Listings Inc all rights reserved 2009. Contact info@otclistings.com or info@fselistings.com for permission to duplicate anything within this article or to contact us about services available to your firm.
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