In tough economic times there are things smaller public companies can do to help ensure they maintain their '34 Act reporting compliance

Although the economy appears to be starting a slight recovery, times remain tough for many companies. Public and private companies once thought beyond reproach have failed or are failing. When the stalwarts of the American economy are struggling how are smaller reporting companies expected to survive and maintain their public company status? While there is no magical elixir, there are several things management of smaller reporting companies can do to improve their chances of remaining publicly-traded companies. Some of these suggestions are cost cutting measures and some are strategic alternatives. By following some or all of the suggestions in this guide we believe smaller reporting companies can drastically improve their chances of remaining listed on their current stock exchange.

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Thursday, 14 May 2009 08:48 Edward H. Weaver

For our clients with a reasonable time horizon for going public – approximately nine months – we often recommend a management-underwritten initial public offering, which is an offering whereby the company’s shares of stock are sold directly to investors by management, rather than through an investment bank or any other underwriter. This offering eliminates the substantial costs associated with using an underwriter or acquiring control of a public shell corporation. If the management-underwritten IPO is a going public strategy that interests you, we offer the following seven tips to help expedite the process and eliminate unwanted delays and expenses:
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FINRA Comments Are Leaving Many Startup Companies “Shell” Shocked

Monday, 13 April 2009 14:51 Edward H. Weaver

Ever since the Securities and Exchange Commission (the “SEC”) amended Rule 144 of the Securities Act of 1933 (“Rule 144”) on February 15, 2008, we have noticed that during the comment phase of the application process to initiate or resume quotations in the OTC Bulletin Board, the Financial Industry Regulatory Authority (“FINRA”) has been more liberal in issuing the “shell” comment to small startup companies, especially companies without revenues. The FINRA comment typically includes a statement that the issuer appears to be a shell company or was a shell company when it issued its shares because of its limited operations and nominal assets. In the same comment, FINRA usually states that the resale of the issuer’s shares is restricted and shares cannot be sold until the provisions of Rule 144(i) are met. Additionally, if the issuer is already a reporting company, FINRA will suggest that the issuer amend its SEC filings to check the box on the facing page to reflect its shell status. Accepting FINRA’s presumption that the issuer is a shell company can have devastating consequences for an issuer and its shareholders because, under the revised Rule 144(i), no shareholder can utilize the Rule 144 exemption from registration to sell his shares if the issuer is, or ever was, a shell company unless the issuer has met the requirements to cure its shell status under Rule 144(i)(2).

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The Long Arm of the (Securities) Law

Tuesday, 10 March 2009 10:43 Craig V. Butler

The Long Arm of the (Securities) Law

In the world of securities law what you don’t know can hurt you. Securities laws reach significantly more transactions than most companies or legal practitioners realize and the failure to properly comply with these laws can have dire consequences.

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Fair Disclosure During PIPE Transactions

Monday, 09 February 2009 07:59 Edward H. Weaver

Fair Disclosure During PIPE Transactions

With the current scarcity of credit, small public companies struggling to raise cash in either the debt or equity markets have been increasingly looking for alternative financing through private investments in public equity, also known as PIPEs. During PIPE transactions, reporting company executives may intentionally or inadvertently share material non-public information with PIPE investors, who, as a result, gain an informational edge over the company’s other shareholders and the ability to use that edge to profit. This type of selective disclosure is prohibited by Regulation FD. For executive officers of reporting companies who are contemplating PIPE financing, there is a simple solution to this problem. For executive officers who have made proscribed selective disclosures under Regulation FD in connection with a PIPE transaction, the Securities and Exchange Commission (“SEC”) has recommended a particular course of action.

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The Lebrecht Group, APLC

5 Ways to Help Maintain '34 Act Reporting Compliance

In tough economic times there are things smaller public companies can do to help ensure they maintain their '34 Act reporting compliance

Seven Tips for Companies Going Public Through a Management-Underwritten Initial Public Offering

FINRA Comments Are Leaving Many Startup Companies “Shell” Shocked

The Long Arm of the (Securities) Law

Fair Disclosure During PIPE Transactions

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