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Microcap & Penny Stocks : 504 Reg D and Beyond - Going public without an Underwriter -- Ignore unavailable to you. Want to Upgrade?

To: micky who wrote (18)	6/30/1998 5:41:00 AM
From: american dreamer	Read Replies (1) \| Respond to of 50

504's and reverse mergers are not mutually exclusive but the don't make much sense together. A properly done 504 will create a modestly capitalized publicly traded company. A reverse merger will usually create a publicly traded company without any capital. Besides the "ghosts" or "skeletons" which accompany shell mergers, the biggest problem with a shell merger is only the deal guys make out. I know, I do this for a living and do everything in my power to discourage a client from merging into a shell. A properly executed 504 is an excellent vehicle for both the company and the investor. The key here is the phrase "properly executed". That means that the deal has to be structured to be justifiable to the investor considering the overall deal and it must be fair to the existing shareholders as well. Additionally the people managing the whole affair must be able to get the market opened quickly, make sure the company files to become fully reporting in a timely fashion, have professionally financial PR in place and do whatever is necessary to provide management with sufficient support and oversight to give it the best possible chance of success. In other words, the whole secret is to structure the deal intelligently, and then to bring in the right people while keeping out the wrong people. Done correctly, the initial investors should enjoy a double or triple on their investment and the subsequent investors should have an excellent shot at a long term profit. Done poorly and you never see the market or there is never enough liquidity to take your profit... or worse yet... the whole thing disappears.