Representation from a Securities & Business Lawyer in Houston

Once the decision to go public is made, businesses need to be aware of how to do so in the way which works best for them. If you have weighed the pros and cons of going public, you need to understand the process so you do not waste precious time and money. Speaking with a highly-trained Houston business & securities attorney can go a long way towards completing the process of going public in the best way for your company.

Whitley LLP Attorneys at Law has a long track record of coming alongside businesses at any stage of their evolution to advise them of the best legal moves to them forward. With more than 15 years of experience behind us and Attorney Samuel E. Whitley was included in the list of Super Lawyers® Rising Stars for the dedicated legal counsel he has consistently offered to his clients over the years.

Taking Your Business Public

Two principal ways to go public exist: IPO or reverse merger/takeover:

• With an IPO, the company registers with the SEC to sell its shares to the public. The company usually hires an investment bank to handle the process of underwriting the offering (selling the shares).
• If an investment bank is hired, they will be paid a commission on the sale of the shares. If an investment bank is hired, they can be engaged on either a “firm commitment” underwriting basis or a “best efforts” basis.
• In a firm commitment offering, the investment bank agrees to buy all of the shares from the company at one price and then resell them to the public at a higher price.
• In a best efforts offering, the investment bank does not commit to purchase all of the shares; rather, it agrees to use its best efforts to sell as many shares as it can and receive a commission on each sale.

In an IPO, the company files a Form S-1 registration statement with the SEC. This registration statement must include audited financial statements, information regarding management, the company’s business and assets, and the intended use of proceeds of the offering.

What is a reverse merger?

In a reverse merger, a private company locates a company that is already public:

• The private company’s shareholders enter into an agreement to sell their stock to the public company in exchange for stock of the public company.
• The private company (or its shareholders) may also pay cash to the public company or its majority shareholders.
• After the transaction is consummated, the private company’s shareholders will control the company and own a large majority of the public company’s stock, and the private company will be a wholly-owned subsidiary of the public company.

The private company’s management will take over management of the public company, and many times the public company will change its name to that of the private company, which is why a reverse merger is sometimes referred to as a reverse takeover.

Our Houston business attorney is ready to walk you through each stage of the process of going public, however you choose to do so. Speak with our firm and we can advise you on the best means of taking your company public.