Reverse Merger

In a reverse merger, the acquirer merges into the target company and the target is the surviving accounting entity with the acquirer is the surviving legal entity. A reverse merger is often the method used for a private operating entity to go public. Generally the public shell receives all of the targets outstanding equity in exchange for stock of the public shell. The newly issued common stock is a controlling interest and can be as much as 95%. The operating business then becomes the surviving legal entity, a public company.  Although a reverse merger is a method of going public without filing a registration statement, complete SEC filings, via an initial super 8-K and subsequent 10-Q’s and 10-K’s are required.

Inquiries of a technical nature are always encouraged. Contact Securities Attorney Laura Anthony.