Reverse Merger Market Improving 2

We learn from the latest DealFlow Report that November has already been the best month for reverse mergers since June. Eight deals have already been completed this month. If one more gets done then it will tie November of last year.

There is no question that bad press and last year’s addition of the “seasoning” limits on reverse mergers have significantly hit the market for shell mergers. But there remains no shortage of companies that want to be public in an environment where an IPO of a smaller company is unavailable for almost all. We are working with clients on other alternatives, including “self-filings.”

I hope the SEC will consider the proposal made by the participants at the annual small business conference last week: allow companies to bypass seasoning limits with a public offering of $15 or $20 million instead of the $40 million currently in the rules. That would really help. I also hope they do a bang-up job on the regulations they are writing to make Regulation A IPOs more attractive.

Happy Thanksgiving to all my loyal US blogees!

2 thoughts on “Reverse Merger Market Improving

  1. Reply Scotty Collins Dec 22, 2012 5:56 pm

    I am doing research on companies that have been suspended to the grey market. Specifically, I want to know if it is possible for a grey market company to sell itself to a shell and thus emerge from grey market status under the new company. Where would I look to find examples of such companies who have been able to take this route back to listing?

    Thanks for any help.

    Scotty Collins

  2. Reply Adam Tindall Feb 4, 2013 1:52 pm

    How does a gray market company emerge from the gray market as a current pink sheet company. My understanding is that a market maker needs to file a form 211 with FINRA and FINRA needs to approve it before the company can ascend to pink sheet current. But, I also understand that market makers are reluctant to file form 211′s with FINRA for gray market shells for fear of tarnishing their relationship with FINRA and the fact there is no money in it for them, just risk.

    In light of this assessment, does it make sense to cure the shell status before approaching a market maker to file the 15c2-11?

    Given the difficulty for gray market companies to obtain pink sheet status I don’t understand why a gray market shell has any value.

    Trading gray market stocks for companies without a dual listing also seems an impossibility since I’m told that 3 quotes from market makers must be obtained before a gray market trade can be executed. I know the spreads might be high for this but is it really in any market makers interest to go through this process?

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