Form 10s Still Popular
By David Feldman at 9 July, 2009, 6:52 am
Despite an article in the recent Reverse Merger Report suggesting there may be no value to Form 10 shells other than to crooks, legitimate players continue to create them for transactions that they develop. Like all things the pace of creating new shells was slowed meaningfully in the last quarter of 2008 and first quarter of 2009. But in the last few months the pace has picked up for sure. Some Chinese clients also are getting into the game, creating new shells as well.
These are 100% clean, admit they are shells from day one, don’t have the hassle of worrying about insider trading prior to a reverse merger and subsequent registration, but have value to investors who insist on putting money only into a public company because it is fully reporting with the SEC. The value is limited to situations where there is a need to raise money sooner rather than later and the investor insists on putting the money into a public company. But for many companies that is a significant value indeed.
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