Preparing For Rule 15c-211 and Form 211

Securities Lawyer 101

Preparing For Rule 15c2-11 & Form

211

Direct Public Offerings remain a popular option for companies seeking to be

quoted by theOTC Markets due to the increased costs and more stringent
regulations associated with Securities and Exchange Commission (SEC)
reporting. Both reporting and non-reporting companies should familiarize
themselves with Rule 15c2-11(SEC Rule 15c2-11) of the Securities
Exchange Act of 1934 (the Exchange Act) before a going public transaction.

Without proper preparation it can difficult for the Company to locate a

sponsoring market maker who will submit its Form 211with the
Financial Industry Regulatory Authority(FINRA).

Proper planning will ensure that the Company meets FINRAs requirements
for assignment of a ticker symbol.

What Is The OTC Markets Quotation System?

The OTC Markets Group operates an electronic inter-dealer quotation system

called OTC Link.

This allows Broker-dealers to trade securities that are not listed on a national
securities-related exchange.

OTC Markets categorizes issuers in tiers based upon the level of disclosure the
Company provides.

Companies whogo publicusingForm 211qualify for quotation by the

OTC Markets.

Companies filing registration statements with the SEC have several listing
options on the OTC Markets.

What Does Form 211 Require For a

Stock Ticker Symbol Assignment?

Form 211 in general, will allow a private Company toget a stock

ticker symbolif:

The Company has at least 25 non-affiliate shareholders who paid

cash consideration for their shares at least 12 months prior to the filing
of theForm 211;
The Company must have at least 1 million shares outstanding,
and at least 250,000 must be trading shares;
The Company must never have been a shell Company; and
The Company must provide adequate information to the public.

How Is Form 211 Submitted to

FINRA?

Rule 15c-211 requires a market maker to sponsor the CompanysForm 211application.

Once a Company locates a sponsoring market maker, the market maker submits the Form
211 to FINRA on the Companys behalf.

FINRA may render comments to theForm 211which the sponsoring market maker and
private Company must respond to.

Once FINRA is satisfied that the Form 211 complies with the requirements of Rule 15c2-11,
it will assign a stock trading symbol and the Market Maker can quote the Companys
securities.

The securities of the private Companyare then quoted by the OTC Markets and the
Company is a public Company.

Once the sponsoring market maker has published quotations for at least 30 days,
additional market makers can publish quotations for the security.

What Other Requirments Apply to Form

211?

The market maker chosen by the Company to sponsor theForm 211application is prohibited from being
compensated for its services.

Rule 15c-211 requires the Company have current public information available prior to publishing quotes for
the security. The information required in the Form 211 satisfies the adequate information requirements of
Rule 15c-211. Form 211requires, among other things, the following disclosures:
Current transfer agent generated shareholder list, indicating name and address of each shareholder, the
number of shares owned, date of share ownership, and whether the shares are restricted, control, or free
trading;
Detailed description of the issuers business, products/services offered, assets and sources of revenue;

Description of the Companys facilities including the location, square footage and whether owned or
leased;
Identification of officers, directors and holders of more than 5% of the Companys securities;
Certificate of Incorporation and bylaws including any amendments;
Description of the Companys free-trading shareholder base, including a description of exemptions from
registration under the Securities Act;

Form 211in Going Public

Transactions (cont.)
Agreements creating restrictions, liens or encumbrances on, or relating to, the transfer or voting of shares;
Agreements evidencing stock rights, warrants or options;
All stock purchase or asset purchase agreements for last five (5) years;

Disclosure of whether the Company has entered into any discussions or negotiations concerning a
potential merger or acquisition candidate;
Merger and/or consolidation agreements;
Partnership and/or joint venture agreements;
Unaudited financial statements for the last 2 fiscal years and interim periods;
Details of all private offerings including who solicited investors, how they were known to the solicitor,
and how many individuals were solicited, and whom did not purchase;
One full copy of the subscription agreement executed by each investor and copies of all checks from
subscribers or other proof of payment;
Copies of Form D filed with the SEC;
Description of all relationships among and between every shareholder and the issuer, its officers and
directors, and other shareholders;

the

Form 211in Going Public

Transactions (cont.)
A statement indicating whether any person or entity has control, written or otherwise, of the sale,
transfer, disposition, voting or any other aspect of the shares listed on the shareholders list other than
the
shareholder;
Whether any officer or director of the issuer had any regulatory action taken against him/her by the
SEC, NASDAQ, NYSE or other securities-related regulatory agency and whether any officer or director of
the
issuer has been convicted of any felony charges within the last 5 years;
A detailed business plan, which includes a detailed chronological account of each and every step
issuer has taken in furtherance of its stated objective since inception;

the

A description of the steps the Company plans to take during the next year in furtherance of its business
plan, including the activities in which the Company plans to engage, the names of the persons who will conduct
these activities, and the expected dates of these activities;
A description of any future financing plan;
Any material agreements or letters of intent entered into by the Company;
Schedule of all material patents, trademarks, trade names, service marks, and copyrights; and
Legal opinion from Companys securities lawyer as to tradability of the free trading shares.

Conclusion

Planning ahead will ensure that the Company qualifies for its ticker
symbol when submitted its Form 211.

For further information about thissecurities law blogpost, please contactBrenda Hamilton,
Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida,(561) 416-8956, by
email atinfo@securitieslawyer101.com.Thissecurities law blogpostis provided as a general
informational service to clients and friends ofHamilton & Associates Law Groupand should
not be construed as, and does not constitute, legal and compliance advice on any specific
matter, nor does this message create an attorney-client relationship. For more information
aboutgoing publicand the rules and regulations affecting the use ofRule 144, Form
8K,crowdfunding,FINRA Rule 6490,Rule 506 private placementofferings and memorandums,
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requirements,DTC Chills, Global Locks,reverse mergers, public shells,direct public offerings
and direct public offerings please contact Hamilton and Associates at(561) 416-8956or
info@securitieslawyer101.com. Please note that the prior results discussed herein do not
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Hamilton & Associates| Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com

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