Market Makers Play a Significant Role in Reverse Mergers

One overlooked individual in the process of taking a company public through reverse merger is the market maker. The market marker is critical especially if the company is going to be listed on OTC Bulletin Board or the NQB. Pink sheets.

Once the private company has decided to go public and has engage a consultant to advise management on the best way to proceed. And a determination has been made to do a reverse merger.

The first step is to identify an available corporate shell to purchase and perform the due diligence on the shell. The company decides to purchase the shell and proceeds with the reverse merger. The required Securities and Exchange Commission filing must be done.

The Securities and Exchange Commission upon reviewing the document and finding the document to be in order will approve the company's filing.

Now the consultant will recommend a market maker to sponsor the company with NASDAQ's Small Cap Market, OTC Bulletin Board or NQB Pink sheets. This is accomplished by filing form 15c211.

The broker dealer may not publish a quotation for any securities unless certain information concerning the issuer is available and the broker or dealer has a reasonable basis for believing that the information is accurate.

Some of those of those Securities and Exchange commission requirement are satisfied if:

(1) Securities Act registration statement (F-6, F-1) has been filed within 90 days.

(2) The issuer is complying with the filing requirements and the broker dealer has in its records the issuer's most recent annual report.

(3) The issuer is complying with rule 12g3-2(b)

(4) The broker dealer has on record information relating to the issuer, its securities, its business, products and facilities, management and financial statements and certain other require information.

The broker dealer is not compensated by company for this service causing the broker to absorb the cost involved in time spent and the regular monthly charges by the OTC. Bulletin Board for being a market maker in the company's stock.

The broker must stay on top of the filing and answer all questions pertinent to filing as requested by the OTC Bulletin Board. After approval the market maker must again file a request to publish a price for the securities of the issuer.

For a short period of time the broker dealer will be the sole market maker, being willing to buy and sell the stock for his own inventory, and assuming all the risk by himself but he also will be involved all the transactions that take place and stands to make all the profits as well.

After a period of time (usually 30 days) other market makers will be able to piggy back on the broker dealer who did the original filing and be able to publish a quotation. This provide more liquidity since a single market maker will not be responsible for all transactions.

Market Makers in Bulletin Board stocks must honor their bid and ask (bid the price they are willing to pay for stock, ask the price they are willing to sell stock) price. Below is a limited chart of the price and size mandated by the OTC.bb.

Price Minimum quote size 0-.50 5,000 0.51-1.00 2,500 1.01-10.00 500 10.01-100.00 200

The market maker role in assisting companies to go public is significant, he is the one who will be taking the risk and will reap the rewards depending on how well the securities trade.

Please visit our website for additional information in going public. www.genesiscorporateadvisors.com

Joseph D. Quinones, President of Genesis Corporate Advisors has spent over 25 years in the securities industry. In 1992 he founded JDQ Financial Group, Inc. and proceeded to build it up from a one man operation to the point where it employed many traders, advised numerous client and generate millions in revenues.

In The News:

National Small Business Week Award Winners  businessjournaldaily.com
How to Help Small Businesses Survive COVID's Next Phase  Harvard Business School Working Knowledge

Environmental Boat Washing and Detailing

Some marine biologists feel that the concentration of dead marine... Read More

Should I Franchise or Not?

A reader of one of my online sessions asked should... Read More

Small Businesses You Can Start in Automotive

There are many choices when thinking about a small business... Read More

Cabinet Refacing Business Opportunities

With all the cabinet refacing business opportunities out there, you... Read More

Credit Repair Business Opportunities - Huge Profit Potential!

In the world today, many people are further in debt... Read More

Employee Monitoring - Business Risks For Employers And How To Avoid Them

E-mail and Internet use are integral parts of the typical... Read More

When and Why YOU Are the Best Writer for Your Business Plan

WHEN you are operating or planning a small business that... Read More

Why Small and Medium-Sized Businesses Should

As the owner or an employee of a small-to medium-sized... Read More

Dig Deep for Small Business Ideas Before You Start the Wrong Business

If you're serious about wanting to start a business, the... Read More

Basic Psychology of Franchisee Ownership and Expansion

If you are a franchisee of a large franchise system;... Read More

Wichita KS; Anything is Possible in Wichita Business

Just when the entire state was kissing Wichita goodbye, economically... Read More

Small Business Owners - They Owe You The Money Why Dont They Pay?

Doesn't it frustrate you when you've given good service, sometimes... Read More

Professional Car Care Businesses You Can Start

If you are in the professional car care business you... Read More

Image is Everything - Secrets to Cleaning Car Fleets

A recent survey indicated that clean Taxi Cabs Fleets have... Read More

Comparing Boston Area for a mobile car wash business

The Boston suburbs seem to be rich with possible locations... Read More

Do I Have to Do EVERYTHING Myself?!

The air in my client's office nearly crackled with her... Read More

FFP vs. CPFF Contracts

SBIR Corner: FFP vs. CPFF contracts:In the SBIR/STTR world, the... Read More

Lawyers Everywhere Telling Regulators What Laws to Make

The Federal Trade Commission decided to sit down and revamp... Read More

Maintaining Your Carpet Extractor in Your Auto Detail Shop

Auto Detailing: Maintaining A Commercial Carpet ExtractorYou should drain your... Read More

Packing Material Thats Cheap!

Shipping materials can be expensive! Even the styrofoam "peanuts" can... Read More

Drivng Home the Point - An Outsourcing Story in China

A few years ago, I visited Beijing for the first... Read More

How to Integrate Yourself in Someone Elses Business

When do you need to get more involved with the... Read More

Arent Small Businesses Lucky?

Why? Because they have access to world class public relations... Read More

FTC Franchise Rule if Enacted will Trigger Hardship for Private Sector

The FTC Franchise Rule maybe changed, as the Federal trade... Read More

Get In Touch With Your Competition!

We all know that competition is an ugly word but... Read More