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REVERSE MERGERS (Shells) with PUBLIC COMPANIES

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We currently have a need and buyers for clean pubic shells

Call/email - Jim Arkebauer 303-758-8710 - arkebauer@ventureA.com

Are you raising money from private investors? - Preparation of Private Placement Documents


(Advantages ** Disadvantages ** What You Need ** Comments)


Your privately held company can become publicly traded by reverse merging your company into a SEC fully reporting and audited publicly held company. This positions you to:

Reverse Mergers are with inactive SEC reporting public companies which usually have no assets or liabilities, no current operating history, and SEC qualified audited financials. Generally, Reverse Mergers usually can be completed in approximately three to four months and the expenses range from US$100,000 to $750,000 with many variables.
James B. Arkebauer, founder of Venture Associates, is the author of the book, GOING PUBLIC (Dearborn Financial Publishing - 348 pages - $29.95). Review the (Detailed Table of Contents). This book has been called the bible on the topic of taking a company public.

Reverse Mergers with Public Companies

ADVANTAGES

DISADVANTAGES

What Do You Need?

A Reverse Merger with a public corporation allows you to:

Some Additional Comments On:

Trading Versus Non-Trading Shells - Trading shells are usually existing publicly traded companies that have fallen on hard times. Frequently, they are companies that went public some years past. They may or may not still be active companies and they may or may not be current in their SEC document filings. They may have a clouded past as regards their business operations and financing activities. They may be on the verge of bankruptcy or have a large number and amount of outstanding liabilities.Acquiring these trading companies will short-cut some of the time of the registration process, and they may have a shareholder base from a few to hundreds or even thousands.

Usually, a reverse merger can be completed from purchse to full trading in 30 to 60 days and the costs for a fully trading, fully reporting company are more than non-tradings shells. Frequently, you can obtain "free-trading" stock. In most cases, their stock will trade on the OTC Bulletin Board in various classes which gives your company a higher level of creditability than Pink Sheet traded stocks. An experienced shell broker can explain the differences of the levels of trading and the free-trading aspects of a particular shell prospect. Acquiring control of a "clean" trading company requires sophisticated, experienced counsel in the performance of due diligence.

Percent of Public Company Held - Most reverse merger transactions are normally structured so that 90% PLUS of the outstanding stock will be held by the owners of the privately held company. Keep in mind that some amount (5% to 20%) of the total outstanding stock needs to be "trading stock" (not owned by insiders and company affiliates) for the public investors.

Tax Implications - Almost all public shell/reverse mergers take advantage of the tax free, stock-for-stock reorganization provision of the Internal Revenue code. Capital gains tax is paid when the individual shareholder sells the stock in the public stock market (usually after the minimum one year holding period for control persons). The timing of the stock sales can be determined by each individual investor to suit their investment or tax consequences. They donít have to wait for the principals of the company to decide to sell the company.

Establishing The Initial Stock Price - Once a reverse merger is completed, a broker/dealer will be involved in making a public market in the stock. The market makers, in conjunction with the company, determine the initial price for the stock. Perceived value, the "sex appeal," track record and potential growth of the company usually have more to do with initial pricing than earnings multiples and current book values. Competent investor relations and supportive market makers as well as managementís ability to relate the companyís potential to investors are of key importance.Ultimately, the public market acceptance of the company will determine the market price for the stock.

On-Going Financing - Once a public reverse merger company is trading, the company then has a number of ways to raise additional funds. Recognize of course, that management has to have a top notch plan and be capable of executing the plan. Positive results enable most companies to continue to raise capital via shareholder rights offerings, warrants, secondary offerings, institutional private placements, conversion of debt to equity, do stock splits and make acquisitions for stock as well as offer combinations of stock and debt. Once management has control, there are numerous possibilities to promote the increasing value of their stock holdings.

Restricted Stock - The U.S. Securities and Exchange Commission (SEC) has many rules and regulations that must be complied with. One of these regards the buying and selling of restricted stock. Restricted stock is stock that is not registered with the SEC, OR stock held by insiders (even if registered). Insiders are generally directors, executive officers and persons or entities that they control or who control them. These persons/entities may sell stock under Rule 144 in any three-month period limited to the greater of: 1% of the outstanding shares of common stock and/or the average trading volume during the four calendar weeks proceeding a sale. Sales under Rule 144 must be made without violating: manner of sale provisions (in the market through a broker/dealer at current market prices), notice requirements (proper forms must be filed with the SEC), and the company must be current in its filing of the required SEC reports.
Restricted stock can be sold or resold privately at any time. It cannot however, be sold through a stockbroker into the public stock market until the "restriction legend" is removed, usually by a Rule 144 transfer after a one year holding period or until the shares are fully registered.

WE CAN ASSIST

We currently have an inventory of clean public shells from Pink Sheet to fully reporting currently trading companies. We are happy to discuss your partiular needs in detail and to see if we can assist you in acquring a clean pubic company. And of course, we are always interested in buying clean shells. If you are a seller, please give us a call/email. Send Jim an email or call 303-758-8710.

We are specialists in the preparation and writing of Private Placement Memorandums.
We will assist you in determining the proper structure for your corporation and offer a review of your articles and by-laws as well as assure that you have the proper provisions for offering both common and preferred stock as well as sufficient officer liability protection. We include assistance in determining your corporate valuation and in deciding fair stock offering prices. Our services are based on the completeness of your business plan (we can also work with you or refer you to top notch business plan writers) and our prices commonly range from $4,000 to $12,000 for the document preparation. You're welcome to contact us regarding questions or comments

More information on Private Placements is available at Private Offerings

James B. Arkebauer, founder of Venture Associates, is the author of various business books including:
"GOING PUBLIC":
Everything You Need to Know to take your Company Public, including Internet Direct Public Offerings"
(Dearborn Financial Publishing - $29.95 - 348 pages - available at book stores across the country- ISBN 0-7931-2835-8)
Review the Detailed Table of Contents. This book has been called the "bible" on the topic of taking a company public.





This third edition includes a new section devoted to conducting an Internet Direct Public Offering (DPO) as well as a new chapter chuck-full of IPO/DPO investor tips. For three editions, this book has been called The Bible on the subject of taking a company public.

CLICK HERE for order information ($20.00) for the full book electronic download version

The third edition is currently out of print. Copies may be available from Amazon.


(Click the Amazon box above)

Our 34th Year of Service
CONTACT INFORMATION
Principal Contact - James B. Arkebauer
Venture Associates - Denver CO
(303)-758- 8710

Send e-mail to Jim at: arkebauer@ventureA.com

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2/02-11/16