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Office of the Superintendent of Securities

Securities Distribution and Going Public


Yukon Archives, Anton Vogee fonds #119

The Benefits of Going Public

- Company's equity base might increase and so more leverage for financing growth through acquisition will be created.

Exit- Going public can provide means for monetizing and liquidity of your invetment in the company.

Increased Market Value- Public traded companies tend to have higher value than private companies.

Financial Flexibility- Going public may allow for execuation of the company's strategy.

Retention and Recruitment of Talented Employees- In public company talented employees are recruited and retained through participation in company's finanicial success by giving them employee shares and various stock options.

Prestige- Publicly traded companies tend to be more visible and prestigious than private companies.

The Disadvantages of Going Public

Increased Costs- The costs of going public are quite high and there are other regulatory costs connected with being a public company (see section Fees).

Regulatory- All material information regarding the public company has to be disclosed and there are other ongoing requirements to be followed.

Market Volatility- Value of the company may be affected by external economic factors and fluctuations in the stock market.

Potential for Reduced Flexibility in Decision Making- Board and shareholders need to be included in key decisions.

Trading Restrictions- Insiders who have access to key information are limited in trading.

What does it take to go public?

Among developing a strategy and planning coordinating the process, the company has to prepare a prospectus which will be sent to the principal regulator for approval and issuance of decision. Thanks to the passport system the company has access to capital markets in multiple jurisdictions while dealing only with one regulator. Approval of the prospectus requires payment of a fee.