Reverse Takeover

Reverse Takeover

Reverse Takeover ["RTO"] is the other way to going public. It is a totally different from the regular Initial Public Offer ["IPO"].


A "Reverse Takeover" is a method by which a private company goes public. In a reverse takeover, a private company merges with a public listed company with no assets or liabilities. (The public company is also called a "shell" corporation). The publicly traded corporation is called a "Shell" since all that exists of the original company is its corporate shell structure. By merging into such an entity, a private company becomes public.


Smartly utilizing public shell companies as the channel to go public could save private businesses huge of dollars and time expense, when compared to the traditional Initial Public Offering ["IPO"] process. Under this way, a private company can become publicly traded by merge with an existing public shell company. There are numerous benefits to using Reverse Takeover with a public shell company, including gaining quickly access to public capital markets and getting more opportunities for business future growth. 


The private company merges into a public shell company and obtains the majority of its interest (around 70% - 80%). The private company can change the name of the public company into its owned name and can appoint and elect new management teams and Board of Directors. The new public company has a base of shareholders sufficient to meet the exchange requirement for admission to quotation on the qualified market. Many Reverse Mergers are structured to trade on the NASDAQ Capital Market or OTCBB, with the intention of moving up to more prestigious markets as the company progress warrants.


The RTO transaction may be completed in as little as few weeks to couple of months when is up to the complicate of the case, resulting in the private company becoming a public trading company. The transaction process involves the private and shell company exchanging information on each other, negotiating the merger terms, and signing a share exchange agreement. At the last stage, the public shell company issues a substantial majority of its shares and the new board can control the private company. The private company shareholders pay for the shell company and contribute their private company shares to the shell company then the private company is now public. 


PBM's Reverse Takeover Planning can well assist your company through the entire process of going public in USA by Reverse Takeover [“RTO”] from introducing qualified and experienced securities attorneys, market makers, accountants and transfer agents to giving professional services on how to structure your company prior to your company's RTO to minimize dilution and maximize financing prospects.

Initial Public Offering - IPO
Special Purpose Acquisition Company - SPAC
Direct Public Offering - DPO
Our Services