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Services

Private to Public

American Capital Investments LLC, Inc. is a consulting company advising companies in the process of going public, preparation for raising capital, and assisting in post-public exposure to the financial markets and the media. Securities attorneys complete all appropriate filings and transactions.

Services for private companies going public include:

  • Form 211 (15c211) Filings
  • Business Plans
  • Due Diligence
  • Corporate Consulting
  • Reg. Offerings
  • Mergers Investments Acquisitions
  • AMEX/NASD Correspondence
  • Broker Dealer Introductions
  • Document Preparation

How long does it take to go public?

The process can be demanding, but assuming the client company provides all the necessary information, audited financial statements, and obtains approval of its Board of Directors promptly; you may expect to be trading in 60 to 120 days after execution of the agreement.

Methods of Going Public

(a) Filing a Form 15c2-11

Rule 15c2-11 was designed to allow non-reporting public company's securities to be quoted on the National Association of Securities Dealers' Over-the-Counter Bulletin Board by filing some simple disclosures.

Now, companies seeking to obtain a quote on the NASD OTCBB are required to file reports with the Securities and Exchange Commission. Under Section 15 of the Securities Exchange Act of 1934 (the as amended, a company who has filed a registered offering with the SEC, such as an SB-1 or SB-2 registration statement is required to file reports for one year. A company which files a Form 10 or Form 10SB (for small business issuers) becomes a reporting company under Section 12g of the Act and must file reports. To be eligible for a quotation of its securities, the company's market maker must file a Form 211 with the NASD, the company must have sufficient free trading stock in its public float to allow Rule 15c2-11.

(b) SB-2 Registration

A private company can directly register its own private shares through an SB-2 Registration to become publicly trading. The SB-2 registration requires that the private company have up-to-date audited financials through a certified SEC compliant CPA and have a valid business preferably with existing revenues and employees. Once the registration has been filed, the process usually takes from 4 to 6 months to obtain a symbol and trading status, providing there are no delays.

(c) Reverse Merger

This is a method by which a private company merges with a public company with no assets or liabilities. The publicly traded corporation is called a public shell since all that exists is its corporate structure. By merging into a public shell a private company becomes public. The private company merges into a public company and obtains the majority of its stock (usually % is negotiated between the private company directors and the public shell owners). The private company normally will change the name of the public corporation (often to its own name) and apply for a new symbol that matches the new name. This process usually takes about 30 days providing there are no delays in the negotiation process between the two entities.

Advantages Of Going Public

The advantages of public trading status, which are outlined in greater detail below, notably include the possibility of commanding a higher price for a later offering of the company's securities. Going public through an SB-2 registration or reverse merger allows a private company to go public typically at a lesser cost and with less stock dilution than through an initial public offering (IPO). While the process of going public and raising capital is combined in an IPO, in a registration or reverse merger these two functions are unbundled; a company can go public without raising additional capital. The private company going public obtains the benefits of publicly trading its securities:

  • Increased liquidity of the ownership shares of the company
  • Higher share price and thus higher company valuation
  • Greater access to the capital markets through the possibility of a future stock offering
  • The ability of the company to make acquisitions of other companies using the company's stock
  • The ability to use stock incentive plans to attract and retain key employees
  • Going public can be part of a retirement strategy for business owners
  • The costs are significantly less than the costs required for an initial public offering
  • The time is considerably less than that for an IPO
  • Additional risk is involved in an IPO in that the IPO may be withdrawn due to an unstable market condition even after most of the up-front-costs have been expended
  • IPOs generally require greater attention from top management while an
  • IPO requires a relatively long and stable earnings history; the lack of an earnings history does not normally keep a privately-held company from completing a reverse merger
  • There is less dilution of ownership control
  • The company does not require an underwriter
  • You will receive a higher valuation for your company

American Capital Investments LLC, Inc. is a consulting firm specializing small-cap and micro-cap private and public companies. All of the companies featured on American Capital Investments LLC, Inc. home page have subscribed to the services of American Capital Investments LLC, Inc. and have paid and continue to pay ongoing fees to American Capital Investments LLC, Inc. in cash and/or stock. Any information or materials published featured client companies have been prepared by the companies themselves or by third parties on behalf of the companies. American Capital Investments LLC, Inc. does not warranty the accuracy or completeness of such information and expressly disclaims any liability American Capital Investments LLC, Inc. therefore. American Capital Investments LLC, Inc. does not provide independent research on the featured companies and does not give investment advice or make recommendations for the purchase or sale of any securities.
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