Haynes Capital Corp.

Listing Strategies

There are a number of paths a company can take to becoming publicly trading including: Intial Public Offering (IPO), Secondary Ofering (DPO), Reverse Merger (RTO) and Cross-listing. With each path comes a set of rules and procedures that a company must follow. Below is a description of some of the more common ways a private company becomes listed.

INTIAL PUBLIC OFFERING (IPO)
A primary or initial offering is the original sale of a company's shares, in which the proceeds from the sale are received directly by the company. This process involves attracting and retaining an underwriter, along with securities lawyers and auditors. A registration statement is prepared and filed with federal and state regulators after which the company goes through an extensive review process. Following the review process, the company goes on a road show and is presented to brokers and investors. The underwriter seeks subscriptions to purchase the company's shares. If the subscriptions are sufficient, the underwriting becomes "firm". The IPO is then closed, the company is public, and the company receives its portion of the offering proceeds. Under some circumstances it is possible to go public without an underwriter.

SECONDARY or DIRECT PUBLIC OFFERING (DPO)
A registered offering of a block of a security which has been previously issued to the public, by a current shareholder. The proceeds of the sale go to the holder; not the issuing company, and the number of shares outstanding does not change. Also called secondary distribution this strategy is sometimes used to provide shareholders who have purchased shares in a private company a market to sell or offer their shares to the public. In a secondary offering there is less scrutiny by the SEC and it is not required to retain an underwriter.

The main advantages of secondary offering are no dilution, it can be quicker since there is less scrutiny from SEC and it gives current shareholders a market for their shares. Companies also find it easier to raise money once this secondary offering is filed and they are publicly trading.