Replies to post #7664 on KeyOn Communications Holdings, Inc. (fka KEYO)

[HMB2010]

Reverse Merger: What it is: A privately held company acquires a "shell company" -- a publicly traded but often dormant company. Through the merger, the private company becomes publicly traded.

How it works: This process is best for an established private company with millions of dollars in annual revenue and profits -- a company that is already following generally accepted accounting principles and could better transition into the Securities Exchange Commission’s (SEC) financial reporting requirements.

Most metropolitan areas have a law firm with a securities practice. One of the partners likely has a dormant public company lined up for a prospective reverse merger client to buy. Odds are, the prospective shell company is not listed on a national securities exchange such as Nasdaq, but is instead traded in a less glamorous setting such as the OTC Bulletin Board.

Your law firm, accountant and potentially a financing consultant will guide you through the regulatory hoops, which culminate in the filing of an SEC Form 8-K that discloses the transaction to the public.

The 8-K is often accompanied with filings including a potential name change, corporate restructuring, and hopefully an infusion of capital from investors the company has already lined up. That includes the Private Investment in Public Equities (PIPE) deals that involve large institutional investors buying up blocks of a public company’s stock.

Related: Alternatives to IPOs

Upside: A reverse merger allows a private company to go public within weeks, versus the months or years involved with an IPO. By becoming public, a company becomes a more attractive investment opportunity to a wider range of investors. The supply of equity capital is more abundant for public companies than for private ones.

This financing technique works best for companies that have a strategic reason to quickly become a public company.

It appears KEYO meets several requirements for a Reverse Merger option....of course, there are many other options available for any of the 11 companies Billionaire PSS owns as well.

I believe Dr. Soon SHiong said he was "going public" soon or in early 2015 or Spring of next year......no filings for IPO yet, so that may be down the road a bit - Im willing to wait and see which company he does a RM with!!