"Future financing The greater number of financing options available to publicly held companies is a primary reason to undergo a reverse takeover. These financing options include:
The issuance of additional stock in a secondary offering An exercise of warrants, where stockholders have the right to purchase additional shares in a company at predetermined prices. When many shareholders with warrants exercise their option to purchase additional shares, the company receives an infusion of capital. Other investors are more likely to invest in a company via a private offering of stock when a mechanism to sell their stock is in place should the company be successful. In addition, the now-publicly held company obtains the benefits of public trading of its securities:
Increased liquidity of company stock Higher company valuation due to a higher share price Greater access to capital markets Ability to acquire other companies through stock transactions Ability to use stock incentive plans to attract and retain employees"
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