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Aspects of a Reporting Public Company

There are many benefits in going public through a reverse merger with a reporting public shell company. These are commonly thought to include the following:

increased visibility in the financial community;
provision of information required under Rule 144 for trading of eligible securities;
compliance with a requirement for admission to quotation on the OTC Bulletin Board maintained by Nasdaq or on the Nasdaq SmallCap Market;
the facilitation of borrowing from financial institutions;
improved trading efficiency;
shareholder liquidity;
greater ease in subsequently raising of capital;
compensation of key employees through stock options for which there may be a market valuation;
enhanced corporate image.

There are also certain perceived disadvantages in being a reporting public company after a reverse merger. These are commonly thought to include the following:

requirement for audited financial statements;
required publication of corporate information;
required filings of periodic and episodic reports with the Securities and Exchange Commission;
increased rules and regulations governing management,
corporate activities and shareholder relations.

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