An Alternative Solution

One alternative to an Initial Public Offering (IPO) is a merger with or the acquisition of an existing public company. In a typical reverse merger transaction, an operating company that seeks to become a public company is merged into a public shell in a transaction in which the public shell is the legal surviving company of the merger, but in which the business of the operating company continues unaffected. Simultaneously with the merger, the owners of the private operating company become the controlling shareholders of the newly merged public company.

• Avoidance of the possible failure of a best efforts underwriting
• Less expensive than an IPO
• Less time to the public market than an IPO
• Ability to keep more control of the company
• Less complex transaction than an IPO

This process not only requires a thorough understanding of general securities laws, but also specific expertise and methodology relative to this type of transaction. Atlas Capital has the ability to provide a comprehensive turn-key solution for our clients. Together with the company’s managment, legal and accounting advisors and representatives, we can assist businesses in handling all facets of the reverse merger process including: location of a public shell corporation with no assets, liabilities or outstanding legal issues; and raising additional financing when necessary. Our professionals have expertise in all of the areas that are required to successfully complete a reverse merger transaction, including strategic planning, corporate and securities law, SEC accounting and investor relations.

Although there will always be disadvantages to going public through a reverse merger, we feel the advantages outweigh the disadvantages. Some disadvantages include, but are not limited to, high upfront cash and/or stock cost, the possibility of contingent liabilities along with a possible hidden cost which lies in the equity retained by the shell.

Atlas Capital offers a unique operating approach by receiving a significant amount of our compensation in the form of equity.  Our willingness to commit extensive resources under this arrangement yields some positive implications to each transaction.  First, we attempt to meet all client objectives and anticipate any issues that would prevent a favorable reception by the market place, as we are risking our own capital. Second, because we are shareholders and essentially partners with our clients, our interests and objectives are aligned with those of our clients throughout the relationship.