Taking Your Company Public: Reverse Merger Or S1 Filing

The dream of taking one's company public is all too often unrealized when a shell merger or reverse merger concept is used. I say concept because this describes a general tactic as opposed to a strategy personified by a direct registration or S1 filing. Shortcuts have no place in a public offering as it lacks the results sought by entrepreneurs and demanded by investors and shareholders. Shells for mergers are typically dogs infested with microscopic flees, the struggle for volume and investor retention is constant, and you'll never have the full legitimacy of an S1 as the previous owners organizational baggage will constantly hinder your development as a public entity as the weight of skeletons in the closet will always outweigh your efforts, thus eliminating the results of IR and other promotional tactics for stock traction in the marketplace.

Going public doesn't have to be painful, all you need is a game plan and experienced agents working on your behalf. If you're broke get a loan, don't attempt a public offering. If your company has a proven concept and solid net revenues then going public may be just the fund-raising tool you've been looking for.

You'll need several things in order to go public properly; the least of these is: an S1 attorney, market maker, investor relations strategist/facilitator, solid board of directors, professional and well pedigreed CEO and CFO (or proven controller) and ongoing consultants for mergers and acquisition identification, research and facilitation (don't think you can grow your public entity organically).

Sure a legitimate public offering via S1 takes a little longer, but it's required for a viable and prosperous public lifespan. The difference between going public via S1 and Shell Merger is as blatant as marrying the prom queen and marrying a corpse sure a shell has skin and bones but wouldn't it be great to have a pulse? Don't sell yourself short. Go public the right way!

Next, How do you decide whether your company is better off doing a reverse merger or a direct S1 filing when going public?

If you're interested in going public you've obviously been bombarded with the realities of shell mergers, reverse mergers, pink sheets, OTCBB, London Exchange and other so called options that will no doubt confuse your efforts. Wolves in sheep's clothing and roses with contaminated thorns run rampant in this industry. People are typically the opposite of what they seem and the options they put up for your consideration more often than not have downsides that won't be realized until the transaction is consummated with the obligatory retainer compensation wire.

Here are the facts: reverse mergers rarely work, Pink Sheet companies typically fail, the Frankfurt Exchange is a glorified cesspool, the London Exchange is as effective as eating 20 bun cakes in one sitting while on a low carb diet and the S1 filing is the only true way of going public for a company under $50m in annual revenues.

Shortcut oriented consultants and organizations insist on reverse mergers into public shells. I'm not judging companies or strategists that have used this method, I'm guilty of using shells in the past when I have a client that insists on this particular process but I always lay out the pro's and con's that come with a shell. If, by some act of God, you are able to buy a pristine OTCBB shell you're going to give up a chunk of equity, pay he maximum premium, and you'll go through the economic equivalent of a proctologic exam before the owner of the shell will allow you to merge and be ready to give in to free trading share demands by the shell owners that will almost certainly leave you with a shell that quickly turns into a volume less cast skin that is virtually worthless unless you have the CRMe de la CRMe of strategies firms watching over every ounce of minutia that involves your shell.

At the end of the day, you won't be happy, and you'll regret taking this shortcut. I have never seen a company that was content with the end result of a shell. The superior process takes a little longer and is virtually the same price, and this is the direct S1 filing. Now be sure you are teamed up with a full service facilitator and not a partial service solution. Most S1 attorneys are just that, a filing attorney but what happens when you are done the S1 and need a market maker for your 15c211 filed with FINRA to get your trading symbol or market creation with investor relations or longevity preservation with the proper corporate structure and strategy in place pre public?

You'll get the best results when you bring on a consultant that has done all the leg work and has put together a solid team consisting of all the relevant and crucial components mandatory for a successful offering and post public prosperity. You need the securities attorney, PCAOB Auditor, compliance team, diversified investor relations processes, pre public alliance facilitation and much more.

A direct filing is the only true OTC offering process that offers your company the ability to succeed; sure it takes a little longer, but it's always the dictating factor that separates successful public OTC companies from those that become rotting carcasses littering the roadside to the goal of raising capital from the public.

More Information:

Want to find out more about Taking Your Company Public, then visit Belvedere Global Strategies Corporation's site on how to choose between a Reverse Merger or S1 Filing for the best results