Tag Archives: otc markets ipo lawyer

Initial Public Offerings on the OTC Markets

What is an IPO on the OTC Markets?

The term “initial public offering” or IPO, refers to the first time a company sells stock to the general public.  To register an IPO, a microcap company seeking to become quoted on the OTC Bulletin Board or OTC Markets files an S-1 Registration Statement.

SEC Comments and Amendments to an S-1

S-1 Registration Statements for IPOs are reviewed by the SEC to monitor compliance. When reviewing an S-1, the SEC staff concentrates on disclosures that may conflict with SEC rules or need further explanation to make them clear. The SEC then issues comments, which the company uses to revise and amend its S-1 Registration Statement.  The amendments are marked S-1/A.

When an S-1 Registration Statement is Declared Effective

After all SEC staff comments have been addressed by the Issuer, the SEC will issue an order declaring the S-1 Registration Statement Effective.  This is shown as EFFECT on SEC.gov, and means the Issuer may sell stock under the S-1 to any investor.

After an S-1 is declared Effective, all of the SEC’s comments and the Issuer’s replies are also made visible on SEC.gov under CORRESP, which is short for “correspondence.”

How do I invest in an OTC Markets IPO?

Microcap companies filing an S-1 Registration Statement to go public usually do not have underwriters.  Instead, the Issuer’s Officers and Directors communicate directly with investors and the stock is sold via Subscription Agreement after the S-1 is declared Effective. S-1 stock purchased soon after the Effective date is free trading, and can be deposited by the Investor into a brokerage account and sold “on the market.”

In order to invest in a microcap OTC Markets IPO, a prospective Investor will need to contact the Issuer or its securities attorney, using the information on the first page of an S-1 to indicate their interest in purchasing stock once the S-1 is declared Effective.

OTC Securities Lawyer Files S-1 Registration Statements for Microcap Companies

Private companies seeking to go public on the OTC Markets can contact securities lawyer Matt Stout for a free consultation at (410) 429-7076 or mstout@otclawyers.com.  All S-1 Registration Statements are prepared under an agreed-upon flat fee.   Matheau J. W. Stout, Esq. can provide introductions to an entire team of S-1 professionals including PCAOB auditors, Transfer Agents, EDGAR filers, Market Makers and DTC Eligibility specialists.