Reverse Merger

Reverse Merger


A reverse merger is one way to go public fast.

I refer you to my website on reverse mergers for all the details: www.reverse-merger.info

Briefly, here, a reverse merger is the acquisition of your company by a non-operating or small public company. Naturally, you have the lion's share of the resulting company.

You may need to do a reverse merger if you do not have or cannot get audited financial statements and you do not want to file a Regulation A offering. Regulation A allows you to use financial statements that have not been audited. However, Reg A requires that the financial statements comply with GAAP.

Reverse mergers have been under a cloud because of Chinese reverse mergers that engaged largely in accounting fraud. The SEC has warned investors about them and allowed the exchanges to require a seasoning period before listing. However, investors will inevitably and eventually look to the merits of your company and not how it went public.

Reverse mergers require you to acquire control of a public company called a public shell because of its limited assets. This usually requires cash and inevitably you have to give up a percentage of your stock. There is also the risk of buying a shell with a hidden defect.

Filing with the SEC may be a better way to go, even for a small company, see our page on self-registration.

On the other hand, if you desire a reverse merger, we have considerable experience in this, contact us. Email us at john.lux@securities-law.info or call us if you would like assistance and advice on the choice.

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