Shells – Reverse Mergers

REVERSE MERGERS (Shells) with PUBLIC COMPANIES

We currently have a need and buyers for clean pubic shells

Are you raising money from private investors? – Preparation of Private Placement Documents

Your privately held company can become publicly traded by reverse merging your company into a SEC fully reporting and audited publicly held company.

This positions you to:

  • Raise additional capital via secondary offerings
  • Make acquisitions using your publicly traded stock.
  • Recruit and retain qualified management and employees
    (offering stock or options in your publicly traded company)

Reverse Mergers are with inactive SEC reporting public companies which usually have no assets or liabilities, no current operating history, and SEC qualified audited financials. Generally, Reverse Mergers usually can be completed in approximately three to four months and the expenses range from US$100,000 to $750,000 with many variables.

Reverse Mergers with Public Companies

ADVANTAGES

Saves Time – Less time than doing an initial pubic offering ( IPO) – 3 to 6 months versus 6 to 9 months at minimum.
Saves Money – Total costs of $100,000 to $750,000, usually under the costs of a traditional IPO, plus no underwriter commissions or fees.
Saves Legal Hassles – The legal work is considerably less than an IPO.
Private Fund Raising – Can be completed prior to the registration.
Public Fund Raising – Can be initiated after the initial registration is complete. This may result in your receiving more money at higher valuations.
Acquisitions – Can be made for public stock after your public company starts trading.
Convert – debt to equity using stock.
You Don’t Have To Be Sexy – Most IPOs need to be in an industry with public investor sex appeal. Any type of company can complete a merger to become publicly held.
Liquidity – Investors can buy and sell your stock, original investors have an “exit” for their investment.
Incentives – Management incentives via stock bonuses/options and to attract and motivate employees are more powerful using public company stock.
Control – You and your current private company shareholders will generally own a large majority of the public company.
Prestige – Publicly traded companies are held in higher regard. This visibility reinforces marketplace and financial standings.
Growth – Grow through acquisitions using stock instead of/or in combination with cash.
Estate Planning – Assists in establishing stock values and the value is easily monitored.
Exit – Provides inside investors with a known exit.
Higher Valuation of Stock
Foreign Companies – Reverse mergers are a simple way to obtain control of a United States publicly traded company without subjecting your foreign operations to U.S tax. (Venture Associates offers confidential service to all foreign firms.)

DISADVANTAGES

Confidentiality – Complete financial disclosure is required to become publicly held.
Public Reporting – Reporting expense is greater because of the need for full disclosure.
Dilution – Owners give up some equity percent.
Time Involvement – Management must devote additional time to public company operations
Liability – More company visibility brings a higher level of liability exposure as well as demand for credibility.
Expense – Higher costs of regulatory compliance for audit, legal and investor relations.