Reverse mergers can be an effective, efficient and economical means by which a private company can become public. However, reverse merger transactions have unique risks and challenges that must be carefully considered. For example, many shells used in reverse merger transactions were created illegally. Also, there are often many contingent liabilities which can haunt the private enterprise which becomes public as a result of the reverse merger transaction. Generally, a direct public offering or initial public offering (if the firm is large enough to attract the interest of an investment banking firm) is a better alternative than a reverse merger.

Contact Public Financial Services if you are thinking about a direct public offering, reverse merger or initial public offering.