Pros and Cons of Going Public Via S-1

Benefits of Going Public via S-1 Registration

  1. Filing an S-1 Registration Statement may provide increased access to capital.
  2. The new public company may attract increased attention from institutional investors who invest only in S-1 registered stock.
  3. A secondary trading market may develop in the future in securities registered in the S-1.
  4. Filing an S-1 may create a future exit strategy for officers and directors if a public market develops for the public company’s securities.
  5. The public company may attract and retain talented personnel by offering stock, or options through a future S-8 plan.
  6. Once an S-1 is effective and a trading symbol is issued by FINRA, transparency is increased since employees and OTC Markets investors can view a public company’s filings and share price at any time.

Obligations for Companies Filing an S-1 Registration

  1. Companies going public via S-1 Registration Statement must keep SEC filings current so shareholders have sufficient public information describing the company’s management, business model, operations, and audited financials.
  2. New public companies filing an S-1 will incur ongoing administrative and compliance costs to retain a PCAOB auditor and experienced securities lawyer.
  3. Officers and Directors of companies that go public via S-1 Registration Statement may be liable if the Company does not meet its legal and compliance obligations.
  4. Public companies filing an S-1 registration must follow certain rules and provide disclosure when undertaking material corporate actions, including seeking shareholder approval.
  5. S-1 Registration Statements require time and money to do properly, and companies must allocate both in order to go public successfully via S-1.

Experienced S-1 Registration Statement Lawyer Matt Stout

Experienced securities lawyer Matt Stout takes companies public via S-1, and files S-1 Registration Statements for entrepreneurs seeking to go public on the OTC Markets and OTC Bulletin Board.   Entrepreneurs with questions on the going public via S-1 process can contact Matheau J. W. Stout, Esq. at (410) 429-7076 or mstout@otclawyers.com.