JB and ZJMY Holding Co (JBZY)

[Stock Farmer]

I have to make a correction to my post on it's all coming together.

From this article, my theory is incorrect. A company does NOT have to be a U.S. private company in order to reverse merge into a U.S. public shell company.

My question goes out to the board:

Why would JB&ZJMY Technology Group Holding incorporate (as a private company I assume) in Nevada at all, if the China based ZJMY could have merged directly into Dolat Ventures?

It's probably covered in Oravek's book.

My answer is this:

There has to be advantages to doing this. Maybe it is to avoid being double taxed. I believe I read something on avoiding being taxed doubly in reference to reverse mergers involving foreign companies.

I understand the Reverse Merger process of a private company going public through a publicly listed shell company.

https://www.hg.org/article.asp?id=24160

A reverse merger is a transaction in which a private company (either U.S. or foreign) is acquired by an existing public “shell company.” Via the merger, the private operating company is able to “go public” by merging into the public shell, giving the operating company stockholders equity in the shell company, and thereby providing theoretical access to funding in the U.S. capital markets (unlike public companies which have a deeper potential funding pool from their access to public investors, private companies generally have much more limited access from private forms of equity). Additional attractions of the reverse merger are that it is quicker and cheaper than a standard initial public offering, with lower legal and accounting fees and no registration required under the Securities Act of 1933. The shell company is a public reporting company with minimal or no operations, while the private company is an actual operating company. The private company shareholders typically exchange their private company shares for a majority of the shell company shares – enough to gain a controlling interest in the voting power and outstanding public shell company shares. In addition, generally, the board of directors and management of the public company are supplanted by that of the private operating company. Finally, the assets and business operations of the post-merger surviving public company are primarily, if not solely, those of the former private operating company.