Reverse Merger: one of several options.

Written by Joseph Quinones


Reverse Merger; One of Several Options

Small and mid-size companies looking to go public usually think IPO (Initial Public offering), but find it difficult to get an underwriter to look at them. They go out and engage a consultant that advises them to do a reverse merger and they usually jump into it head first without exploringrepparttar options. 1. If you have read some of my previous articles you may find this repetitious, but I can’t emphasis enoughrepparttar 146028 importance of selecting a good consultant. A consultant that is working for you and you alone, and does not have an interest in selling you a corporate shell and getting your company trading, so that they can sell their stock and move on torepparttar 146029 next victim. What arerepparttar 146030 options? (1) An initial public offering (ipo) isrepparttar 146031 absolute best butrepparttar 146032 most difficult and most expensive but withrepparttar 146033 financing that is raised it will enablerepparttar 146034 company to be listed on one ofrepparttar 146035 more visible markets. Such as Nasdaq Small Cap, or American Stock Exchange. And if your company is big enough it may qualify forrepparttar 146036 Nasdaq National Market System, which would make your company attractive to analyst and institutional investors. (2) A Reverse Merger is forrepparttar 146037 those small and mid-size companies that are aggressive and will like to grow quickly and find that by being a public company they can achieve those goal sooner. I will give you some ofrepparttar 146038 benefits of being a public company later. In a reverse mergerrepparttar 146039 privately held company purchases a publicly traded company with substantially no assets (a “shell”). The shell issues stock torepparttar 146040 owners ofrepparttar 146041 private company. The shell issues sufficient stock, usually 90-95% enough to effectively controlrepparttar 146042 public company. The public company will normally change its name torepparttar 146043 private company’s name and elect a new Board of Directors which will appointrepparttar 146044 officers. The public corporation will usually have a base of shareholders sufficient to meetrepparttar 146045 300 shareholders requirement for eventual admission to quotation onrepparttar 146046 NASDAQ Small Cap Market orrepparttar 146047 American Stock Exchange (ifrepparttar 146048 private company’s financial condition substantiates either NASDAQ or AMEX requirements). Although some shells have as few as 35-50 shareholders and currently listed (or can apply for listing onrepparttar 146049 OTC Bulletin Board orrepparttar 146050 NQB Pink Sheets.

"Trading With the Help of the Experts"

Written by Joseph Sgro


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