Reverse Merger

Bridge Capital Inc. does not get involved in "Reverse Mergers". The following is for informational and website marketing purposes only.
Overview | Preparation | Pro's and Con's | Rules Regarding Shell Companies
SEC Information

A "Reverse Merger" is a method by which a private company can go public by merging with a public company. In a reverse merger a private company merges with a public company that usually has no assets or liabilities. The public company in most reverse merger scenarios is usually referred to as a "trading shell company" or a "reporting company".

After the reverse merger the private company would retain most of the public companies shares and would be trading under the name of the private company prior to the merger. The board members of the trading shell company would resign and the private company would appoint their own board of directors.

The biggest advantage of a private company doing a reverse merger with a publicly traded company is the time it takes to get to public markets. If a private company goes public by way of a reverse merger with a publicly traded company they can do so in usually two weeks instead of going through a filing process that takes between six months to one year.

REVERSE MERGER FACTS

  • Shell companies that report to the United States Securities and Exchange Commission (SEC) do not have hidden liabilities, hidden shares or potential litigation.
  • Nearly half of the companies trading on the OTC.BB Exchange went public by way of a reverse merger.
  • All private companies that go public by way of a reverse merger experience higher evaluations once public.
  • All private companies have an easier time raising capital after going public due to shareholder liquidity and reporting requirements.
  • Ted Turner did a reverse merger with Rice Broadcasting Inc. which became Turner Broadcasting Inc.
  • Blockbuster Video went public by way of a reverse merger.
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