Going Public 473Dough.com Inc. now is a publicly held company with a couple of thousand
shareholders spread throughout the United States and Britain.
THE MORNING AFTER
Although the infusion of over $30 million of net capital in the company is of
major significance, the life of the company in public mode has drastically
changed. The company’s executives and directors have taken on both new roles
and serious potential liabilities. The company itself has become obligated to
feed the public’s earnings appetite, and the requirements of the regulatory au-
thorities for a continuous stream of accurate information.
As a publicly held company with shares quoted on NASDAQ and regis-
tered under the Securities Exchange Act of 1934, both the company and its ex-
ecutives have further become responsible for the filing of very specific and
complex reporting forms.
The company itself must keep the public informed by filing within 90
days of each fiscal year-end, on Form 10-K, an extensive discussion of the com-
pany’s business and financial condition. Much like a prospectus, the Form 10-K
contains a description of the business, properties, and legal proceedings involv-
ing the company, an MD&A (management’s discussion and analysis of financial
condition and results of operations) for the three prior years, three years of
audited financial statements, and a variety of other information about the com-
pany’s stock, the company’s management, and (typically although not specifi-
cally required by regulation) an ongoing and updated list of risk factors.
Less comprehensive but equally required by regulation, the company
must file within 45 days of the end of each of its fiscal quarters (except for the
year-end) a quarterly report of its financial condition on Form 10-Q, and fur-
thermore must file periodic reports on Form 8-K within several days after the
occurrence of significant events, such as a change of control, the acquisition or
disposition of significant assets, a change in the auditors, or a resignation of di-
rectors because of disagreement.
The company will be required by NASDAQ to provide a written annual re-
port with audited financial statements to all of its stockholders. Corporate prac-
tice will require the corporation to hold an annual meeting of its stockholders,
generally within two or three months of the release of the annual report on
Form 10-K, which will contain the financial statements for the prior year.
Now that the company’s stock is widely held by a couple of thousand peo-
ple in diverse locations, it is necessary for management to seek written voting
authorization, through signature and return of a proxy card, by which stock-
holders authorize designated members of management to vote the shares of
such investors for the election of directors and for any other action to be taken
at the annual meeting. Proxy regulations of the SEC will require that the com-
pany send extensive written information (a “proxy statement”) to each stock-
holder in advance of the annual meeting, and in connection with management’s