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Laura Anthony, Attorney
Legal & Compliance, LLC
330 Clematis Street, Ste. 217
West Palm Beach, FL 33401

Toll Free: 1.800.341.2684
Phone: 561.514.0936
Fax: 561.514.0832


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Going Public Glossary


8-K
A form required to be filed with the Securities and Exchange Commission by companies subject to the reporting requirements of the Securities Exchange Act of 1934. Form 8-K must be filed upon the occurrence of certain reportable events such as the entry into or termination of material contracts outside the ordinary course of business, change in officers or directors or the sale of unregistered securities. The report must be filed within four days of the reportable event. In the event that a Form 10-K or 10-Q is filed within that four day period, the information may be included in the 10-K or 10-Q instead of a separate 8-K.

10-K
An annual report that must be filed with the Securities and Exchange Commission by companies subject to the reporting requirements of the Securities Exchange Act of 1934. Form 10-K must include audited financial statements as well as a detailed management discussion regarding those financial statements and planned future operations.

10-Q
A quarterly report that must be filed with the Securities and Exchange Commission by companies subject to the reporting requirements of the Securities Exchange Act of 1934. Form 10-Q must include reviewed financial statements as well as a detailed management discussion regarding those financial statements and planned future operations.

14-C
This is an Information Statement filed with the Securities and Exchange Commission and mailed to all shareholders notifying shareholders that the Company has taken certain actions that required shareholder consent, and that the company has taken such actions upon written consent of the shareholders without holding a shareholder meeting. A 14-C Information Statement is required by Section 14 of the Securities Exchange Act of 1934 regulating the proxy rules

14-A
Proxy Statement filed with the filed with the Securities and Exchange Commission and mailed to all shareholders notifying shareholders of and prior to a shareholder meeting. In addition to other information, must set forth all matters to be voted on at the upcoming shareholder meeting. A 14-A Proxy Statement is required by Section 14 of the Securities Exchange Act of 1934 regulating the proxy rules

14f-1
The 14f-1 is an Information Statement filed with the Securities and Exchange Commission and mailed to all shareholders notifying shareholders that the Company has entered into an arrangement whereby the Company will have a change in the majority of its directors

15c211
A form filed with FINRA by a Market Maker so that they may begin quoting a Company’s securities on the open market.

Accredited Investor
A term used by the SEC under Regulation D to define investors that are financially sophisticated and have no need for the protection provided by certain government filings; also known as a qualified purchaser.

Acquisition
When one company purchases a majority interest in another business entity.

AMEX Public Shell
A public corporation qualified for trading on the American Stock Exchange (AMEX) that is called a "shell" since all that exists of the original company is its corporate shell structure and shareholders. It has no business operation or significant assets.

Annual Meeting of Directors
A meeting held each year to elect officers of a corporation and to address other corporate matters and usually follows immediately after an Annual Meeting of Shareholders.

Annual Meeting of Shareholders
A meeting held each year to elect directors of a corporation and to address other corporate matters.

Articles of Incorporation
A set of documents filed with a government body for the purpose of legally documenting the creation of a corporation; also referred to as the "corporate charter." 

Authorized Capital
The total number of a corporations authorized shares multiplied by the shares par value.

Authorized Shares
The number of shares of a corporation’s stock that the corporation has the authority to issue and the authorized shares of a class of stock is stated in a corporation’s articles of incorporation.

Authorized Stock
The maximum number of shares that a corporation is legally permitted to issue under its articles of incorporation. This figure is usually listed in the capital accounts section of the balance sheet. 

Blank Check Company
A company in a developmental stage that doesn't have an established business plan or has a business plan that revolves around a merger or an acquisition of another firm. 

Blank Check Preferred Stock
A method companies use to simplify the process of creating new classes of preferred stock to raise additional funds from sophisticated investors without obtaining separate shareholder approval. 

Board of Directors
A group of individuals who are elected by stockholders to establish corporate management policies and make decisions on major company issues, such as dividend policies. 

Bulletin Board
An electronic trading service offered by the National Association of Security Dealers (FINRA) that shows real-time quotes, last-sale prices, and volume information for over-the-counter (OTC) equity securities. OTC securities include newer small cap companies, national, regional and foreign equity issues, warrants, units, American Depositary Receipts (ADRs) and Direct Participation Programs (DPPs).

Bulletin Board Shell
A public corporation qualified for trading on the OTCBB or Over the Counter Bulletin Board market that is called a "shell" since all that exists of the original company is its corporate shell structure and shareholders. It has no business operation or significant assets.

CUSIP
A number identifying all stocks and registered bonds. The Committee on Uniform Securities Identification Procedures (CUSIP) oversees the entire CUSIP system.

Capital Stock
The common and preferred stock a company is authorized to issue, according to their corporate charter.

Capital Structure
The means by which a firm is financed.

Certificate of Good Standing
A document issued by the secretary of state or equivalent department that certifies that a corporation in validly existing and in compliance with all periodic and taxation requirements.

Chief Executive Officer or CEO
This is the senior manager who is responsible for overseeing the activities of an entire company.

Chief Financial Officer or CFO
This is the senior manager who is responsible for overseeing the financial activities of an entire company. This includes signing checks, monitoring cash flow, and financial planning.

Certificated Stock
A stock of commodity that has been inspected by qualified representatives and determined to be of basis grade. 

Chairman
The highest-ranking officer in a corporation's board of directors. Presides over corporate meetings. Sometimes has executive authority over a firm, sometimes does not.

Chief Executive Officer or CEO
An executive of a company who shares responsibility for the operation of his/her company. The executive who is responsible for a company's operations, usually the President or the Chairman of the Board.

Chief Financial Officer or CFO
An executive of a company who shares responsibility for the operation of his/her company.

Chief Operating Officer or COO
An executive of a company who shares responsibility for the operation of his/her company.

Common Stock
A class of stock of a company that allows its holders to have a common ownership and to have residual claims on the assets of a corporation after all debts have been settled and all obligations of the preferred stockholders have been met.

Conversion or Conversion Rights
Rights allowing the holder of shares of stock or other financial instrument to convert to other shares of stock.

Convertible Instrument
Financial instruments such as bonds or notes that can be converted into shares of stock and these shares of stock may also be convertible into shares of another class.

Corporate Governance
The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law.

Corporate Officer
An officer of a corporation.

Corporate Secretary
A corporate officer, elected by the directors, usually charged with record-keeping responsibilities.

Corporation
A legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses; that is, a corporation has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes.  The most important aspect of a corporation is limited liability. That is, shareholders have the right to participate in the profits, through dividends and/or the appreciation of stock, but are not held personally liable for the company's debts.

CUSIP Number
A number identifying all stocks and registered bonds. The Committee on Uniform Securities Identification Procedures (CUSIP) oversees the entire CUSIP system.

Debt Private Placement
Raising of capital via private rather than public placement. The result is the sale of securities to a relatively small number of investors

Depository Trust & Clearing Corporation or DTCC
The DTCC is a holding company consisting of 5 clearing corporations and 1 depository, making it the world's largest financial services corporation dealing in post trade transactions. 

Depository Trust Company or DTC
One of the world's largest securities depositories, it holds in excess of $10 trillion worth of securities in custody. The DTC acts like a clearing house to settle trades in corporate and municipal securities.

Dilution
The effect of reducing existing shareholder interest in a corporation when new shares are issued.

Direct Public Offering or DPO
Offering securities directly without a brokerage firm.

Director
An executive of a company who shares responsibility for the operation of his/her company.

Dissolution
The process of shutting down a corporation and settling its affairs in the course of bringing it to an end.

Earnings Per Share or EPS
The portion of a company's profit allocated to each outstanding share of common stock. 

EDGAR
The Electronic Data Gathering and Retrieval System; otherwise known as the
The Securities and Exchange Commission's electronic system. It is used by all publicly-traded companies for submitting their required filings to the SEC.

Equity Financing
The sale of securities representing ownership in a corporation for the purpose of raising capital.

Equity Offering
An offering of a security or stock.

Equity Private Placement
Raising of capital via private rather than public placement. The result is the sale of securities to a relatively small number of investors

Evergreen Requirements
This is an industry term used to describe Rule 144’s impact on shell companies following the Rule’s amendment in February, 2008. Under the so called “evergreen requirement”, a company that ever reported as a shell must be current in its filings with the SEC for 12 months before investors can sell unregistered shares. Here is the hitch. As a result, the restrictive legend can never be removed in advance of a sale.

Exchange Act
The Exchange Act requires publicly held companies to disclose information continually about their business operations, financial conditions, and managements. These companies, and in many cases their officers, directors and significant shareholders, must file periodic reports or other disclosure documents with the SEC. In some cases, the company must deliver the information directly to investors.
 
Form 8-K
This is a form required to be filed with the Securities and Exchange Commission by companies subject to the reporting requirements of the Securities Exchange Act of 1934. Form 8-K must be filed upon the occurrence of certain reportable events such as the entry into or termination of material contracts outside the ordinary course of business, change in officers or directors or the sale of unregistered securities. The report must be filed within four days of the reportable event. In the event that a Form 10-K or 10-Q is filed within that four day period, the information may be included in the 10-K or 10-Q instead of a separate 8-K.

Form 10-K
A Form 10-K is an annual report that must be filed with the Securities and Exchange Commission by companies subject to the reporting requirements of the Securities Exchange Act of 1934. Form 10-K must include audited financial statements as well as a detailed management discussion regarding those financial statements and planned future operations.

Form 10-Q
Form 10-Q is a quarterly report that must be filed with the Securities and Exchange Commission by companies subject to the reporting requirements of the Securities Exchange Act of 1934. Form 10-Q must include reviewed financial statements as well as a detailed management discussion regarding those financial statements and planned future operations.

Form 14-C
Form 14-C is an Information Statement filed with the Securities and Exchange Commission and mailed to all shareholders notifying shareholders that the Company has taken certain actions that required shareholder consent, and that the company has taken such actions upon written consent of the shareholders without holding a shareholder meeting. A 14-C Information Statement is required by Section 14 of the Securities Exchange Act of 1934 regulating the proxy rules

Form 14-A
This is a Proxy Statement filed with the filed with the Securities and Exchange Commission and mailed to all shareholders notifying shareholders of and prior to a shareholder meeting. In addition to other information, must set forth all matters to be voted on at the upcoming shareholder meeting. A 14-A Proxy Statement is required by Section 14 of the Securities Exchange Act of 1934 regulating the proxy rules

Form 14f-1
A Form 14f-1 is an Information Statement filed with the Securities and Exchange Commission and mailed to all shareholders notifying shareholders that the Company has entered into an arrangement whereby the Company will have a change in the majority of its directors

Form 144
A form that must be filed with the SEC when an executive officer, director, or affiliate of a company places an order to sell that company's stock. Also known as Rule 144.

Forward Triangular Merger
A type of merger that occurs when the subsidiary of the acquiring corporation merges with the target firm.

Free-Trading Stock
Stock that can be resold without any restrictions. Typically, stock that has been registered with the Securities and Exchange Commission is free trading. Some types of securities issued in transactions exempt from registration may also be freely tradable if the criteria upon which the exemption is relied is met. To be truly free trading, the stock must be free of both federal and state restrictions on resale. The free trading portion of the outstanding stock of a company is also known as the float.

Fully Reporting Company
A public company that is subject to the Securities and Exchange Commission’s periodic reporting requirements.

Generally Accepted Accounting Principles or GAAP
The common set of accounting principles, standards and procedures. GAAP is a combination of authoritative standards (set by policy boards) and the accepted ways of doing accounting.

Good Standing
A state a corporation is said to be in Good Standing when it is in full compliance with the law.

Going Public
The process of selling shares that were formerly privately held to new investors for the first time. Otherwise known as an initial public offering (IPO).

Initial Public Offering or IPO
The first sale of stock by a private company to the public. IPOs are often smaller, younger companies seeking capital to expand their business.

Insider
An executive of a company who shares responsibility for the operation of his/her company.

Investment Banker
A financial intermediary that performs a variety of services. This includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations.

Investor Relations or IR
A department, present in most medium to large public companies, or an outside consultant, that provides investors with an accurate account of the affairs of the company. This helps investors to make informed buy or sell decisions.

Issuer
The party selling or offering to sell its securities.

Listing
The acceptance of a security for trading on a registered exchange.

Listed Security
Securities that have been accepted for trading purposes by a recognized and regulated exchange.

Listing Requirements
Requirements imposed on companies by the various national exchanges that they must meet in order to be part of the trading activity on that particular exchange. Listing requirements vary between the NYSE, NASDAQ, AMEX, etc., but in all cases the company’s stock must meet a minimum share price, the company must possess a minimum asset value, there must be minimum number of shareholders, so on and so forth. In addition, to initial listing requirements all national exchanges maintain ongoing listing requirements and corporate governance standards which must be satisfied.

Market
Typically refers to the equity market where stocks are traded.

Market Maker
A "market maker" is a firm that stands ready to buy and sell a particular stock on a regular and continuous basis at a publicly quoted price. The term Market Maker is most often used in the context of the NASDAQ or other Over the Counter (OTC) markets. There are approximately 2000 Market Makers in the United States that are registered with FINRA.

Merger
The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.

Merger and Acquisition or M&A
The merging and acquiring of corporations.

Mergers and Acquisitions Firm
A firm that consults on the merging and acquiring of other corporations.

Micro-Cap
Micro cap refers to a company with a market capitalization of between $50 million to $300 million.

FINRA or Financial Industry Regulatory Authority
A securities industry organization responsible for the operation and regulation of the NASDAQ stock market and Over the Count, OTC, markets.

NASDAQ
The NASDAQ was the world's first electronic stock market. The NASDAQ is a computerized system that facilitates trading and provides price quotations on some 5,000 of the more actively traded over-the-counter stocks.

NASDAQ Listing
The process of having a company's securities trading on NASDAQ, a computerized system that facilitates trading and provides price quotations on some 5,000 of the more actively traded over-the-counter stocks.

NASDAQ Public Shell
A public corporation that is called a "shell" since all that exists of the original company is its corporate shell structure and shareholders. It has no business operation or significant assets.

New Issue
The event of a security being sold to the public for the first time.

No Par Shares
Shares for which there is no designated par value.

Non-Reporting Shell

A public shell company quoted on either the Pink Sheets or Grey Sheets and not subject to the reporting requirements of the Securities Exchange Act 1934.

Non-Trading Shell
A public shell company that is not actively traded or is thinly traded.

Officer
An executive of a company who shares responsibility for the operation of his/her company.

Over the Counter or OTC
An electronic trading service that shows real-time quotes, last-sale prices, and volume information for Over the Counter, OTC, equity securities.

OTC Bulletin Board Listing
The process having a company's securities eligible for trading on the over the counter bulletin board.

OTCBB Public Shell
A public corporation that is called a "shell" since all that exists of the original company is its corporate shell structure and shareholders. It has no business operation or significant assets.

Outstanding Shares
The portion of a Company’s authorized shares that have been sold to the public and/or that are held by the company’s founders or any of the company’s shareholders. Stock that is outstanding can be either free-trading or restricted.

Penny Stock
A stock which sells for less than one dollar per share (or in some cases, less than five dollars per share). Penny stocks are almost always small cap stocks, but the reverse isn't necessarily true. They are traded on the OTC Bulletin Board and the Pink Sheets.

Piggyback Registration
When an underwriter allows existing holdings of a company's shares to be sold in conjunction with an offering of new public shares.

Pink Sheet Listing
The process having a company’s securities eligible for trading on the Pink Sheets or National Quotations Bureau.

Pink Sheet Stock
Stocks trading on the Pink Sheets.

Pink Sheets
Electronic quotation system by the National Quotation Bureau containing price quotations for Over the Counter or OTC stocks.

Pink Sheet Shell
A public corporation qualified for trading on the Pink Sheets that is called a "shell" since all that exists of the original company is its corporate shell structure and shareholders. It has no business operation or significant assets.

Preferred Stock
A class of ownership in a corporation with a stated dividend that must be paid before dividends to common stock holders. Preferred stock does not usually have voting rights.

Private Company
A company whose ownership is private and, thus, do not need to meet the strict SEC filing requirements of public companies.

Private Placement
Raising of capital via private rather than public placement. The result is the sale of securities to a relatively small number of investors.

Public Company Accounting Oversight Board or PCAOB
A non-profit organization that regulates auditors of publicly traded companies.

Public Shell
A public corporation that is called a "shell" since all that exists of the original company is its corporate shell structure and shareholders.  It has no business operation or significant assets.

Publicly Traded Company
A public corporation.

Registration
The process of filing the registration statement with federal and/or state authorities.

Registration Statement
A carefully prepared set of documents, including a prospectus, which is filed with the SEC prior to an initial public offering.

Regulation A
An SEC regulation that governs offerings of $5,000,000 or less, which qualify for simplified registration or an exemption.

Regulation D or Reg D
A Securities and Exchange Commission (SEC) regulation governing private placement exemptions.

Reporting Public Shell
A public shell that is reporting with the SEC.

Reporting Requirements
Requirements imposed by the Securities Exchange Act of 1934 and rules promulgated thereunder.

Restricted Stock
Insider holdings that are under some other kind of sales restriction. Restricted stock must be traded in compliance with special SEC regulations.

Reverse Merger
A method used to go public. A private company merges with an existing public company or a subsidiary of a public company. In a reverse merger, an operating private company merges with a public company which has no assets or known liabilities (the "shell" corporation). The public corporation is called a "shell" since all that exists of the original company is its corporate shell structure and shareholders. The private company obtains the majority of the shell’s stock. The private company normally will change the name of the public corporation (often to its own name) and will elect its Board of Directors which will appoint the officers.

Reverse Stock Split
A reduction in the number of a corporation's shares outstanding that increases the par value of its stock or its earnings per share. The market value of the total number of shares (market capitalization) remains the same.

Reverse Takeover or RTO
The buying out of larger company by a smaller company or the purchasing of a public company by a private company.

Reverse Triangular Merger
When the subsidiary of the acquiring corporation merges with the target firm. In this case, the subsidiary's equity merges with the target firm's stock. As a result of the merger, the target would become a wholly-owned subsidiary of the acquirer and shareholders of the target would get shares of the acquirer.

Rule 144A
A Securities & Exchange Commission rule modifying a two-year holding period requirement on privately placed securities to permit qualified institutional buyers to trade these positions among themselves.

Rule 504
A Securities and Exchange Commission (SEC) regulation governing private placement exemptions and a part of Regulation D. Rule 504 provides an exemption for companies that are not subject to the reporting requirements of the Exchange Act of 1934 for the offer and sale of up to $1 million of securities in a 12 month period.

Rule 505
A Securities and Exchange Commission (SEC) regulation governing private placement exemptions and a part of Regulation D. Rule 505 exempts offers by companies of up to $5 million of securities in a 12 month period as long as offers are made without general solicitation or advertising, and there are no more than 35 unaccredited purchasers.

Rule 506
A Securities and Exchange Commission (SEC) regulation governing private placement exemptions and a part of Regulation D. Rule 506 is a safe harbor under the private placement exemption (Section 4(2)). There is no limit on the amount of securities that can be offered or sold, so long as (i) offers are made without general solicitation or advertising, and (ii) the sales are made only to accredited investors or no more than 35 unaccredited investors and all investors must be sophisticated.

S-1 Registration Statement
The S-1 Registration Statement is the general form for the registration of securities. This Form is used for the registration under the Securities Act of 1933 (“Securities Act”) of securities of all registrants for which no other form is authorized or prescribed.

S-3 Registration Statement
This is also a form of Registration Statement. This form can be used by public companies that are subject to the reporting requirements of the Securities Exchange Act of 1934, are current in their reporting requirements; provided however, that this form is not available to small public issuers. That is, to use this form the issuer must have an aggregate market value of common equity in excess of $75 million.

S-8 Registration Statement
Form of registration statement. A Form S-8 registration statement can be used by Issuers to register securities to be offered to employees under certain employee benefit plans.

SEC
Securities and Exchange Commission

Securities
An instrument representing ownership of stocks.

Securities Act
The Securities Act generally requires companies to give investors "full disclosure" of all "material facts," the facts investors would find important in making an investment decision. This Act also requires companies to file a registration statement with the SEC that includes information for investors. The SEC does not evaluate the merits of offerings, or determine if the securities offered are "good" investments. The SEC staff reviews registration statements and declares them "effective" if companies satisfy our disclosure rules.

Securities Attorney
An attorney specializing in the laws pertaining to instruments representing ownership of stocks.

Securities Registration Statement
This is a form filed with the Securities and Exchange Commission to register securities for sale to the public.

Shareholder
Any person, company, or other institution that owns at least one share in a company. A shareholder may also be referred to as a stockholder.

Shelf Offering
An SEC provision allowing an issuer to register a new issue security without selling the entire issue at once. 

Shelf Registration
A term used for the SEC rule 415, which allows a corporation the ability to comply with registration requirements up to 2 years before doing a public offering. The corporation must still file the required annual and quarterly reports to the SEC. 

Shelf Registration Statement
This is a registration statement on Form S-3 that allows companies, that qualify to use that Form, to register a block of securities for future sale (i.e. to sit on the shelf).

Shell Corporation
A corporation without active business operations or significant assets.

Small Cap
Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million to $2 billion. 

Stock
A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings. There are two main types of stock common and preferred. Common stock usually entitles the owner the right to vote at shareholder meetings and to receive dividends that the company has declared. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event a company goes bankrupt and is liquidated. Also known as shares, or equity.

Stock Option
A privilege, sold by one party to another, that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price during a certain period of time or on a specific date.

Stock Split
The dividing of a company's existing stock into multiple shares. In a 2-for-1 split, each stockholder receives an additional share for each share he or she holds.

Stock Symbol
A unique symbol assigned to a security. NYSE and AMEX listed stocks have symbols of three characters or less. NASDAQ-listed securities have four or five characters. If a fifth letter appears, it identifies the security as other than a single issue of common stock. Stock symbols are also known as tickers or ticker symbols.

Transfer Agent
A licensed business which maintains records of stock ownership and records all stock transactions on the books of an issuer.

Underwriter
An organization that raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).

Underwriting
The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).

Unified Registration Statement
This is a state level registration statement. A Unified Registration Statement allows companies that are registering securities in multiple states, to file a single unified registration statement in such states.

Vertical Merger
A merger between two companies producing different goods or services for one specific finished product. 


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