Videolocity International Inc (VCTY)

[tgroot00]

How Long Does it Take?

http://reversemergerblog.com/2010/02/09/tip-of-the-week-how-long-does-it-take-part-i/

If you choose a non-reporting shell on the Pink Sheets, the filing of the 14f-1 and “super” 8-K is not required, nor do audits have to be completed, and no insider filings are required. While some investors hesitate to invest in a Pink Sheet shell merger, no question it can be done more quickly than a merger with a reporting shell. However, due diligence on Pink Sheet shells can be more tricky than reporting shells because no public information is typically available. But a Pink Sheet shell merger can be done as quickly as a month, but more typically 1-2 months.

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This is pretty straightforward. If you combine with a shell that trades on the Pink Sheets or the OTC Bulletin Board, when you complete the reverse merger, trading simply continues. The same people who had tradable shares before the merger continue to have their shares after and can trade them. The thing is, though, if those people represented maybe 30-40% of the total shares outstanding of the shell (because the balance is typically controlled by a majority shareholder whose shares generally are not tradable), following the transaction they may only represent 1-2% of the total shares outstanding. Thus, the entire “public float” of a company immediately after merging with a trading OTCBB shell is very small indeed. Until more shares become tradable either by being registered with the SEC or applying an exemption from registration, that small float, which rarely trades much at all, will be the company’s entire float. But more about getting to “real” trading in the next installment. But yes, there is technically a trading market immediately after the merger in this situation.

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In either case, though, the registration still may not bring the significant trading you are looking for. The two ways to pursue that: (1) get a strong investor relations (IR) firm in to start selling your company’s story to Wall Street, and oh yeah, make sure you are keeping the promises you make about expectations and performance, or (2) do a two-step WRASP type approach to going public (see prior posts for more info on WRASPs) where a Form 10 merger and PIPE is followed by an immediate registration and application to the NYSE AMEX or Nasdaq where, in either case, “real’ trading is much more likely to develop sooner. How long? In a WRASP this can happen in just a few months after going public with a Form 10 merger. In a merger with a “legacy” shell with at least 400 shareholders and a strong company that qualifies for listing on a major exchange, that also can happen in a few months. And yes, in some cases strong trading can be developed on the OTC Bulletin Board, or even the Pink Sheets, if the company is performing well and using a capable IR firm.