Public shells and reverse mergers are not something new. However, the concepts are new to many people that may not have otherwise paid much attention. The radical upheavals of our economy have lead many more companies to look into dealing with public shells. There are a lot of people who do not vote for public shell transactions today. But, for those that are looking to learn more about the concept, here are a few facts to consider when exploring the subject:
1.The SEC has made a number of alterations to the laws associated with public shells. This makes entering into such an arrangement a lot riskier than what it may have been in the past. This does not mean it is a bad idea per se but it is riskier.
2.If you are considering working with a traditional IPO to achieve your goals, then this is really not a wise idea right now. It has become a lot harder and it requires much more capital than in the past. A self-underwritten IPO might work for you. Again, this is not an easy process but those willing to go this route probably would be up for the challenge. If your capital allows you to pursue this you may consider it. It can however take up to 9 months to finish all the processes involved with the public shell concept. Some may find this a little too long to wait which brings us to our next point....
3.It can be possible to venture into a reverse merger into a public shell because the process can be completed in a much quicker manner. Actually, it can take as little time as 60 or 90 days. For those wishing to expedite the process, this may be the way to go. However, the cost and risk associated with the reverse merger may be a little too much for people to bear.
4.Beware of those partners that can prove to be unscrupulous. Sadly, there are a number of people in the industry that lack ethics and they need to be avoided or, at the very least, be aware of them.
5.Sellers have to comply with all aspects of the contract or else sales could end up being deemed invalid and void. This does happen so one needs to keep this in mind. SEC rules need to be complied with 100% of the time or else the process could end up being illegal.
