Uplist Series Part III: Investment Banking

Uplis Series

Uplist Series Part III: Investment Banking

Welcome to Part III of our UpListing Series: Investment Banking. In order to Uplist to NASDAQ or NYSE, there is no requirement that your company undertake an offering to raise capital provided you meet the Exchange requirements. Specifically, if your company has the required amount of shareholders and at least $5m in shareholders equity then a simultaneous capital raise is not necessary as part of the Uplist process. However, many companies who are looking to Uplist may need to undertake a simultaneous registered offering in order to meet the thresholds required by a higher exchange.

For example, both exchanges require a positive shareholders equity of at least $5m and for the company to have at least 300 shareholders. Some OTC companies do not meet these requirements and therefore may need to undertake a registered offering in order to raise the capital required to meet the shareholders equity requirement as well as to bring in the retail shareholders to meet the requirement to have at least 300 shareholders.

If your company needs to undertake a registered offering then you will need an investment banker to underwrite such offering. At Uplisting, we have worked with many of the small and mid-cap investment bankers who underwrite the types of registered offerings mentioned above. These bankers have experience working with OTC companies who need to raise capital as part of the Uplist process.

In addition to meeting the requirements for an Uplist, a registered offering might allow your company to raise capital on more favorable terms than a PIPE or other type of financing. At Uplisting, we suggest that you raise the minimum amount of funds necessary to get to the higher exchange and then raise additional funds once you are on the higher exchange which, likely, will be at a higher valuation.

We educate our clients on the time, costs and process for a registered offering so they can make the proper decision when choosing a banker and evaluate, with their counsel, the terms and proposals.

These are some preliminary considerations when deciding which investment banker is best for your company:

1. Capabilities/Credentials/Experience.  Who will lead the equity capital markets and syndication functions for your company’s offering? Who will be your company’s primary day-to-day contact at the banking firm? What are the most relevant transactions they have worked on and how successful have those deals been?

2. Positioning/Knowledge of the company/valuation methodology. What is the recommended positioning of your company? What is the proposed strategy for positioning relative to other comparable or competitive companies? Which companies represent the best comps? How would your company be differentiated from some of the recent offerings (attempted or completed) in your sector? Has the bank provided a description of the valuation methodology it is using to value your company? What valuation metrics will investors focus on?

3. Shared values. Take your time and make sure you are picking a banker that shares your values and spirit. You need to work with a banker that is excited about your vision for the company. What level of vetting has the banker conducted with its research analyst to date and what can they share about their analyst’s view of your company? Is the bank currently working with any of your competitors? If so, has it decided how to address potential conflicts of interest?

4. Execution strategy. Are the senior members of the investment banking team committed to attending the organizational meeting, drafting sessions, and other key meetings? What process does the bank follow for pricing and allocating shares? What are the bank’s views on stabilization activities and strategies, including willingness to commit capital?

5. Aftermarket support.  Have the banks described their firm’s aftermarket services, including non-deal road shows. What conferences and other industry or investor events does the bank sponsor that are suitable for your participation? Ask the bank to describe its research coverage expertise in the life science industry, and in your targeted therapeutic areas, if any. Do they have a strong retail division?

In Part Four of our Series we will talk about the requirements for a foreign issuer to uplist and how this differs from a US public company.


Click this link to see Uplist Series Part I: UpListing to a Senior Exchange in 2018

Click this link to see Uplist Series Part II: Corporate Governance


About Todd Heinzl:

Currently Managing Director of The Governance Box (GBX) and UpListing.com, Todd Heinzl holds over 25 years of experience in the investment and financial services industry. With a focus on assisting globally minded micro and small cap companies achieve up-listing results for their shareholders, UpListing.com offers CEO’s and their Board of Directors uplist strategic plans, through collaboration, in the development and implementation of effective uplist strategy and governance policy. As managing director of both financial advising enterprises, Mr. Heinzl works with companies from a variety of industries with a focus on their corporate governance and subsequently to facilitate their uplisting to senior exchanges such as NASDAQ and NYSE American. Mr. Heinzl is a member in good standing with the National Association of Corporate Directors (NACD), European Corporate Governance Institute (ECGI), and the Royal Canadian Military Institute (RCMI).


The views & opinions expressed in any guest post featured on our site are those of the guest author and do not necessarily reflect the opinions & views of PubCoCEO.com or the community as a whole.

If you would like to share a guest post on PubCoCEO.com, Contact Us.

This post is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.


One comment

Leave a Reply