Understanding a Reverse Merger Below : The priv

Understanding a Reverse Merger Below :

The private company becomes public by merging with or being acquired by a public “shell” company. The shell company is either a public company that has no assets or liabilities or active shell. When the private company and public shell merge, the combined entity thereafter trades under the previously private or public company’s name..

PIPE. A PIPE is when a publicly traded company sells its stock to investors in a privately negotiated transaction. The stock is normally sold at a discount to current market value..

At the closing of an APO, the public shell and private company sign merger documents to complete the reverse merger; file a Super 8K with the Securities and Exchange Commission (SEC), which is the required public disclosure of transaction; file a registration statement with the SEC to register the PIPE shares; release PIPE funds from escrow; and issue a press release announcing the completion of the transaction. The company’s stock now begins trading on the OTCBB, reflecting the new valuation.