Reverse Mergers Tag

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29 Sep Equity Crowdfunding vs. Reverse Mergers

I've seen the debate raging on both Investorshub, Linkedin and Twitter: should a company perform a reverse merger or vie for the equity crowdfunding route? It's an interesting question which does not, unfortunately, have a overarching answer for each firm that may be weighing the pros and cons of each--and there are pros and cons of both. I would like to discuss a bit about the pros and cons of equity crowdfunding as well as some of the pros and cons of going public via a reverse merger. Each company considering one option over another should weigh out each scenario...

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19 Sep Horizon Pharma #RTO of Vidara Therapeutics on NASDAQ

This news initially came yesterday and the deal was set to be closed as of today. The reverse takeover by Horizon Pharma of Vidara Therapeutics represents a logical combination of two biotherapeutic companies. Both firms hold proprietary rights to biotechnology drugs for the treatment of inflammation, osteoporosis and arthritis. Horizon Pharma, Inc. (NASDAQ: HZNP) today announced that at its Special Meeting of Stockholders held today, proposals related to Horizon's acquisition of Vidara Therapeutics International plc were approved by Horizon's stockholders. As previously announced, on March 18, 2014, Horizon Pharma, Inc. ("Horizon"), Vidara Therapeutics Holdings LLC, Vidara Therapeutics International plc, an Irish public limited...

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Startup Diagram Structure

17 Sep Should You Take Your Startup Public?

I love start up companies. Bold entrepreneurs are a big part of the American spirit. Assisting them has always been a passion as many a consultant with enough life experience has been in similar shoes. In working with these folks we're often asked, "is it a good move to take my start up public?" or "is my start up a good candidate for a reverse merger?" These are almost always "it depends" questions. For most, the answer is flat out "no", for the rest the caveats, risks and opportunities are outlined below. Hopefully this provides some insight. Types of companies where...

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10 Sep Equitynet’s True Untapped Potential

Although not yet fully implemented, the JOBS Act promises to be a complete game-changer for the capital markets. I don't think we're truly cognizant of how huge the opportunity equity crowdfunding presents to both investors and entrepreneurs alike. As many have touted, it truly democratizes capital, providing needed liquidity to both nascent and established businesses alike. Even when crowdfunding becomes fully integrated into the complex and regulated financial system, the portals will still be required to follow the rules of engagement. But massive opportunity awaits them. And, while there are a number of crowdfunding portals out there, I've chosen to...

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Due Diligence

10 Sep Reverse Merger Due Diligence

As I've said before, I think a shell is a great adjective for a previously publicly traded company as it indicates something died inside. Proper due diligence of a public shell is an absolute necessity for private companies looking to take their business to the public markets. What follows is a good starting list of due diligence items (although not complete exhaustive) when investigating a public shell corporation.   Check required SEC filings including those required by directors, officers and shareholders with greater than 5% equity in the business. It's good to ensure all filings are current and such reports should provide...

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27 Sep Financing for Reverse Mergers

Generally speaking, financing is easier to obtain when a company goes public because investors are seeking an opportunity for liquidity. Although it is difficult to overstate the importance of financing as regards reverse mergers, about half of these mergers, in recent years, involve no financing whatsoever. This does not imply that there is no intention to seek financing at some point in the future, which again relates back to the fact that being public is an easier way to access capital. The financing itself can take the form of simple debt financings or factoring arrangements while others can be more...

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