For real companies that either meet, or are close to meeting the listing requirements of one of the three major stock exchanges, the properly structured reverse merger transaction, has become a very attractive alternative. It can be accomplished for a fraction of the costs of a conventional IPO with a 100% certainty of success. In this transaction, a privately-held business, seeking to expand its financing alternatives beyond those available with private equity or commercial banks, agrees to merge into an existing publicly-traded company with little in the way of operations, assets or liabilities.
Concurrent with the merger, the name of the public company is changed to reflect the name of the new operating company, new management and Directors are installed and we undertake a reverse split of the outstanding shares in order to achieve the desired float and rational initial market cap.
Unlike the conventional IPO, which can take between 6 and 9 months to complete, a company wishing to become public, via reverse merger, can be trading in as little as three (3) weeks. For companies that meet the listing requirements of the NYSE Alternative (AMEX), it can be listed in as little as sixty (60) days.