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

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Registration Statement: Go Public by Registration Statement

Introduction to the S-1 Registration Statements

An S-1 Registration Statement is a comprehensive narrative of the private company going public or public Company registering additional securities. The company going public is required to disclose detailed information including, but not limited to, description of the company's business; any assets or properties it may own or control; identification of the company’s officers and directors, pending material transactions between the company and its officers and directors; specific pending legal proceedings; the plan for distributing the securities; and the intended use of the proceeds.

An S-1 Registration Statement is filed with the Securities and Exchange Commission (SEC) to register the sale of stock, either directly by the company going public and/or by certain selling shareholders. The S-1 Registration Statement includes detailed discussions of the business, its operations, the market in which it operates and its management and also includes audited financial statements.

In addition to the information expressly required by the form, the company going public must also provide any other information necessary to make the statements complete and not misleading.

The main benefit to a private company going public through the filing of an S-1 Registration Statement as opposed to through a reverse merger is that the Company does not have to be concerned about undisclosed, potential or contingent liabilities. Moreover, the SEC rules relating to shell companies (such as Rule 144 and Rule 145) prevent the operating company’s shareholders from selling stock using the Rule 144 exemption for twelve months following the completion of the merger.

Two Components of the S-1 Registration Statement

There are two basic components to the S-1 Registration Statement;

The Prospectus – The prospectus is also known as the “selling document” or “legal offering document.”

In the prospectus the Issuer (the Company selling the securities) details key information about the Company’s management history, current business operations, and overall financial condition. Any investor who intends to buy shares of the new issue must have access to the prospectus by law.

The second component of the S-1 Registration Statement documents any other relevant information that the Company is not legally required to deliver to investors, but that is important to their decision-making process.

Elements of the S- 1 Registration Statement Format

The format is compromised of approximately eight elements. In order to register their securities offerings, the Company must include detailed information on all of the following eight topics;

Business Summary

The type of business the Company transacts or will transact is spelled out in the business summary of the Company going public. This description includes, but is not limited to its product, technology or service, its distribution and manufacturing methods, and the overall character of their operations.

Financial Statements

Financial statements audited by an independent certified public accountant are included in the Registration Statement. Elements include income statements from the last three years and balance sheets from the last two fiscal years. Any and all financial statements must be in compliance with public company accounting requirements and generally accepted accounting principles (GAAP).

Financial Summary

The Company’s financial statement is comprised of a summary of pertinent financial information.

Management and Compensation

This element of the statement has become increasingly more important recently since it identifies the Company's officers and directors and clearly spells out their compensation whether it is in the form of cash or securities. Any material transactions between the Company and its directors and officers are also detailed, along with any material legal proceedings they may be involved in that could impact the Company going public.

Analysis of Financial Condition and Results of Operations

This financial analysis covers at least the three most recent fiscal years or since inception. The analysis focuses on any material changes or nonrecurring items that may skew the comparison of results. This section analyzes and compares the company's financial statements on an interim period and annual basis.

Risk Factors

The risks and uncertainties of investing in the company are clearly described in this section of the S-1 Registration Statement. For new companies going public, risk factors may include; lack of a market for the securities being offered, reliance on key personnel or on a limited number of suppliers, intense industry competition, a limited business operating history, and adverse economic conditions in a particular industry.

Stock Offerings

The plan to distribute securities must be disclosed. In addition, the Registration Statement must include whether or not underwriters will be used, describe the size of the offering and whether or not the distribution plan will include options or warrants. Weighted average exercise price is a good example of the details that are disclosed in this section of the statement.

Use of Proceeds

The private Company seeking to go public must disclose exactly how they intend to use the proceeds from their stock offering. Even if the intended use is general in nature, as many details as possible must be included.

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