Reverse Mergers

A Reverse Merger is an alternative method for a private company to become publicly traded. It is synonymous with an IPO (Initial Public Offering), but less expensive and quicker; avoiding the lengthy and complex process of going public.

In a reverse merger, a privately held company that desires to go public merges into a publicly traded company that has minimal assets and operations. The publicly traded corporation is called a “shell” since all that exists of the original company is its organizational structure. The private company shareholders receive a substantial majority of the shares of the public company and control of its board of directors. The transaction can be accomplished within weeks.

Benefits:

• Initial costs are much lower than through an initial public offering (IPO), and excessive investment banking fees are avoided.

• The time frame for becoming public is considerably shorter. The process for a conventional IPO can last for a year or more. By contrast, a reverse takeover can be completed in few weeks.
• The private company does not go through an expensive and time-consuming review with state and federal regulators because this process was completed beforehand with the public company.
• The company can now use its stock as currency to finance acquisitions and attract quality management.
• Capital is easier to raise as investors now have a clearly defined exit strategy through the public markets.

The accountants at Weinstein & Co. can assist your company in completing this transaction. Call Today: 077-738 6666.