Ways to go Public IPO REVERSE MERGER WITH TRADING SHELL MERGER AND REGISTER
IPO An Initial Public Offering (IPO) can take one year to several years and cost as high as one million dollars or more.
An IPO's fees are related to the difficulty of the due diligence of the company, audit, the inherent fees of an underwriter and attorney.
THERE IS A BETTER WAY TO REACH THE SAME GOALS IN LESS TIME WITH LESS COST. REVERSE MERGER WITH TRADING SHELL In a reverse merger, a private company merges with a publicly listed company, which has no assets or liabilities and is in good standings with its required filings to the SEC. The publicly traded corporation is called a "Blank Check" since all that exists of the original company are its corporate shell structure and shareholder base. By merging into such an entity, a private company becomes public and/or a subsidiary of the public company.
The requirements of private companies are as follows: Up to 2 years audit filed within 75 days of merger; refiling of the SEC form 10-SB (60-day process); quick form 15c with the NASD assuming 90 days have not lapsed of being removed from the exchange it was trading on. (A long form is needed if 90 days have lapsed).
Fees for this merger are in the range of 500k. Ownership for the private company is as low as 60% after the merger. The estimated time-line for closing a merger including all filings and due diligence is 2 to 4 months. Price is determined by the perceived value of the private company and ownership retained. THERE IS A BETTER WAY TO REACH THE SAME GOALS IN LESS TIME WITH LESS COST.
MERGER AND REGISTER
In a merger with a private company for the purpose of registering with the SEC you gain more control for much less money. The company to be registered must be structured to meet all requirements necessary to become a public trading company. Some of these requirements include: shareholders who meet the provisions of rule 144 of the SEC, 300 shareholder base with round lots of 100 shares and, corporate structure with bylaw requirements.
This type of merger will have the same results as the Blank Check merger except for four critical differences: (1) the trading time/line becomes 4-6 months (subject to comments from the SEC and NASD), (2) audit is due on registration, (3) ownership for the private company is as low as 90% after the merger and (4) the fee is about half that of the Blank Check's $500,000 fee.
LET'S REVIEW
TYPE
COST
TIME TO TRADING
COMPANY OWNERSHIP
IPO
One Million plus
one to several years
based on offering
Reverse Merger With Trading Shell
$500,000 plus
2-3 months
as low as 60%
MergerAnd Register
½ price
4-6 months
as low as 90%
With a Registered Public Company You Can:
·Appoint its Director(s) and thereafter its management; ·Change the corporate headquarters and, if need be, change the state of incorporation (Domicile); ·Increase its authorized shares for future offerings; ·Use restricted stock to cancel debt'; ·Use stock incentive plans to attract and keep key employees; ·Use its stock for acquisitions; ·Allow the stock to trade in its industry multiples creating a market cap greater than its book value; ·Raise capital based on your trading value while offering less ownership of the company.
