Asyst Technologies, Inc. (fka ASYTQ)

[stevebrooks]

Another situation that I often come across is CEO’s who want to go public and don’t have any money for the audit or the legal fees.

There are certain expenses associated with going public that need to be paid. These CEO’s often want to do a reverse merger because it’s the fastest way to go public, but Public Shells are expensive and could be the costliest avenue use to go public.

When a private company purchases a Public Shell, the purchaser must perform a thorough due diligence of the Public Shell to make sure that it is clean and not bringing any past legal problem to the private company.

The due diligence process often get neglected because the private company is not familiar with the ins and outs of the public arena.

So they often take the advised given by the shell owner and submit to his demands. When companies rush to go public they often live to regret it, short cuts can be very expensive. I always give CEO’s who call me the alternative to reverse merger, such as Direct public offering, Regulation D or IPO but if their minds are already made up or they may have already purchased the Shell without doing proper due diligence.

I will do all I can to try and make it work but the CEO must be warn of the perils ahead and how to prepare for them. For example if he does have a lot of shareholders and a lot of shares outstanding he must reverse split the shares to reduce the number of shares available for sale including those own by the Shell owner.

The Shell owner will often require the private company to sign an agreement not to reverse the share prior to the sale, if they agree to this demand they will be making a big mistake.

http://www.hooverwebdesign.com/business/finance/take-your-company-public.php