Aventura Equities Inc (AVNE)

[up all night]

Advantages of a Reverse Merger Versus an IPO
http://www.reversemergerblog.com/2006/12/advantages-of-reverse-merger-versus-ipo.html

# Lower Cost – Reverse mergers usually cost significantly less than an IPO. Total costs can be much less than $1 million, depending on the cost of the shell and whether or not the private company has already completed proper audits of its financial statements. In fact, it is not unusual for a reverse merger to cost less than $200,000. An IPO, on the other hand, is much more expensive, costing at least several million dollars before factoring in underwriting commissions to those raising IPO capital.

# Speedier Process – Prior to the SEC’s new reverse merger rules enacted in June 2005, most reverse mergers involving legitimate players completing proper due diligence and negotiation of documents were taking two to three months from start to finish, and it is estimated that the new rules should only add about one month to most transactions. Since passing the rule, however, some deals in my shop have been completed in as fast as six weeks (though this is not the norm). In contrast, a typical IPO takes 9 mos. to a year to complete, and can easily take longer.

# No IPO Window Necessary – Sometimes there is no market for IPOs, and during these times the IPO “window” is said to be “closed.” That window slammed shut following the tech crash in 2000, and has only re-opened slightly, and mostly for larger companies.

# Much Less Management Attention Required – Most senior executives do not realize what they’re getting into when they pursue a traditional IPO. Endless domestic and international travel, due diligence meetings and late nights at the printer are the norm, and a year away from building the business while pursuing an IPO can damage a company’s ability to execute its business plan. Reverse mergers need significantly less attention by management than IPOs, though, because the transaction is quicker and less complex, and most of the work can be handled by a capable CFO working with counsel and auditors.

# No Underwriter - An underwriter's main goal is to make a company look just right to for an IPO to potential financers, which can be different from management's vision. Underwriters are unnecessary in the reverse merger process.

# No Risk of Underwriter’s Withdrawal – One of the riskier aspects of an IPO is that an underwriter can decide to terminate the deal or significantly change the share price of the offering at the last minute, meaning that much of the success of an IPO depends upon the state of the market during the week that the stock begins to trade. No underwriter means reverse mergers are not market-sensitive.

# Less Dilution – Because an underwriter is paid based on how much capital is raised, too often in an IPO the underwriter essentially forces the company to take more money than it could possibly need. Because less money is raised in funding a reverse merger (and there’s no underwriter driving the financing), there is less dilution, allowing a private company’s management, founders and prior investors to retain a greater percentage of ownership of their company.