Conclusion
It is always wise to consult your SEC attorney, CPA firm and an investment banker before deciding whether to take your company public via a registration statement or reverse shell merger. Both vehicles have their pros and cons.
The investment banker will want to go the route that works best for your intended financing. The PCAOB audit is mandatory so the CPA firm gets paid regardless of which route you take. Your SEC attorney may have a bias towards filing the registration statement versus the reverse merger. Why? The registration statement requires a larger amount of work and therefore his fees tend to be much higher versus a reverse merger. However, with some law firms, you can negotiate a flat rate price for filing the registration statement, inclusive of responses to comments from the SEC.
The larger and more recognizable the law and audit firm is the more you will be paying for their services. If you can afford retain a “name brand” law firm and investment bank along with a top 4 audit firm by all means go for it. The association with those firms will add value and credibility to your company. They charge substantially more for their services but as the old saying goes “you get what you pay for.”
If, on the other hand, you are on a tight budget you can still achieve the same goal but at a fraction of the cost.
Ralph Amato is the CEO of Ventana Capital Partners (www.ventanacapitalpartners.com).
Ventana specializes in consulting to company’s that are seeking alternative means to go public. Ventana also represents the principals of OTCBB shells that are seeking emerging growth companies as reverse merger candidates for their shells.
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