BUY A PUBLIC SHELL?
To become a public company quickly, one of the most
expeditious routes is to acquire an existing public company, and
merge a private company into it. Commonly referred to as a 'Reverse
Merger', taking a Company public this way is not new at all. Several
nationally known, very successful and now large profitable companies
got to be a public company by way of a reverse merger.
The reverse merger process has been utilized by
many successful and well known business people. The process has
also been successfully used by those in the public securities profession.
For example, early in 1996, Muriel Siebert, who made history on
Wall Street, by becoming the first woman to buy a seat on the New
York Stock Exchange (NYSE), took her brokerage firm public through
a reverse merger with a liquidated publicly traded New York furniture
These and other top business people realized that
to become a public company quickly, acquiring an existing public
company was the easiest and most cost effective way to accomplish
Merging a private company with a public company
must be completed in such a way that potential difficulties can
be minimized or avoided. When a private company merges with a public
company that had been active, there becomes a real and dangerous
potential of finding 'skeletons in the closet'. These may be in
the form of unsettled or pending lawsuits, dissatisfied shareholders,
late or negligent filing of reports with the various regulatory
bodies, environmental or other problems.
SCA., can offer for sale a "clean" public
company for the purposes of a reverse merger, that has never traded
nor have any operations. Usually, these public shell entities have
an authorized share capital of approximately 50,000,000 shares.
Approximately 1,000,000 - 5,000,000 shares are issued and outstanding.
In the reverse merger transaction, a private company shareholders
may acquire a substantial portion of the public company shares,
and elect it's own officers and directors. Through this process,
the private company shareholders own shares in a publicly traded
Subject to current securities rules and regulations,
the company can then access the capital markets through private
placements and secondary stock offerings. The company can also begin
to maximize the awareness of the company's new publicly traded status
to the investment community, thus establishing a public market for
Taking a company public through this route, may
be accomplished very quickly compared to the traditional IPO route
which may not be available to most candidates anyway. SCA specializes
in merging private companies with clean public shells through a
unique and relatively inexpensive method.