S-1 Registration Statement vs a Public Shell Corporation

Many small companies often wonder how to take aB. Using a reverse merger to become a publicly traded
company public. They may have heard in past yearscompany rather quickly used to be one of its
about doing a reverse merger with a public shell, whichadvantages. This is no longer true, because SEC rules
is a very risky transaction.now require that you have your financial statements
It's a really bad idea to do a reverse merger with aaudited when doing the merger. Prior SEC rules gave
public shell corporation. The SEC has made someyou 75 days to have the financial statements
adjustments that have made public shell corporationsprepared. Also, the document which must be filed to
nearly obsolete.report the reverse merger (Form 8-K) must now have
Reverse mergers, or RTO's (Reverse Takeover) as athe same exact information as the registration
way of going public is something all companies shouldstatement.
avoid at all costs. Filing a registration statementC. Costs are now much more substantial than they
(typically an S-1 registration statement) with the SEC isused to be. An OTC trading company will demand as
a much more advantageous than a merger with amuch as $750,000 for the reverse takeover process.
publicly traded company:There are other ways to complete the process of
A. By filing a registration statement, it allows you totaking your company public for $100k or less, with a
structure your company as you prefer. If you decidesmall amount of stock included in the deal.
to merge with a publicly traded company or shellBeing a publicly traded company can help a company
corporation, you must accept a shareholder base thatgrow in many ways. The best way to accomplish this
you are not familiar with and who may sell shares intois to do it without using a public shell or a reverse
the market at an unfavorable time.merger.