Locate a Suitable Public Shell: Public shells are available by simply searching on the Internet, however, our group has access to suitable shells with a clean history. This avoids many pitfalls going forward.
Full Business Plan: All those involved in the transaction from public shareholders to market makers and potential investors will want to see a full business plan.
Experienced Management Team: Public companies require a strong management team to attract investors and to give confidence in the business going forward.
Strong Marketing Plan: Being able to show a comprehensive marketing plan to generate future earnings is important to the process.
Product or Service: A public company should be able to demonstrate a strong product or service that will generate significant income.
Audits: Audited statements will be required for at least the previous two years of operation.
Experienced Counsel: Regulatory compliance is very important as a public company. Your legal representatives must be qualified to be able to report as per the SEC rules.
Public Company Experience: At least one of your directors must have public company experience. Our group can help provide qualified directors for this purpose if you do not have a suitable person within your business.
Formulate Your Financial Strategy Going Forward: Many companies choose the reverse merger route in order to attract further financing for their businesses. It is important to consider, even at the early stages of the process, what your financial requirements will be.
Requirements To Close
Business Plan of Merger Partner: Information must be collated and presented to enable the initial necessary (8-K) filing to be produced.
Management Information: All officers and directors must complete a questionnaire for submission.
Agreement On Structure and Terms of Merger: The agreement must be in place as to how the transaction is going to be completed.
Letter of Intent and Escrow Payment Made For Public Company: Shell company vendors will be in discussions with others to acquire their shells. Once a suitable shell is found it is necessary to make a deposit prior to further due diligence to cease negotiations with other buyers.
Audited Financial Statement: GAAP standard accounts must be prepared for the private merger partner. These accounts will then be consolidated within the public company.
Consent From the Majority: The public company holds a vote to agree the merger with the private company.
Board Control: Agreement for the Directors of the public shell to be replaced with the Officers and directors designated by the private company merger partner.
Post Merger Structure: Number of shares to be outstanding “post merger”, and a complete breakdown of share ownership post merger. Note: It is often necessary for the public shell to do a reverse split and/or cancel shares owned by the affiliates of the public share prior to completing the merger.
Domicile Agreement: Agreement on the State the company will be domiciled in post merger.
Appointment of SEC Counsel and Auditors: Appointment of qualified lawyers and auditors that will represent the company.
Share Exchange Agreement: Share purchase agreement, definitive merger agreement and all other documentation completed.
Preparation of the 8-K Filing: The 8-K is required to be filed within 4 days of the merger taking place. This is why all of the information needs to be completed before the final stages of the merger.
