Alternative Public Offerings (APOs) & Reverse Mergers

SRFK is a recognized leader in advising and representing issuers in all methods of achieving public company status, including Reverse Mergers, Alternative Public Offerings (APOs) and Self Registration. SRFK’s Corporate and Securities Law Practice Groups support clients in navigating the complex U.S. regulatory landscape and advising them on sophisticated nuances involved in reverse mergers and related financing transactions.

A reverse merger is a method by which an active privately-owned operating company goes public by completing a transaction with a public shell company, with the public company surviving the transaction but having issued a controlling share of the company’s stock to the owners of the privately-owned operating company. The public shell company then typically changes its name to reflect the operating business of the privately-owned operating company. Most public companies that enter into reverse mergers are shell companies, which are companies that have no significant operations or assets.

An alternative public offering is the combination of a reverse merger with a simultaneous private investment in public equity (PIPE). APOs allow companies an alternative to an IPO as a means of going public while raising capital. APOs have gained momentum in recent years because going public via reverse merger allows a privately-held company to become publicly-traded faster, at a lower cost and with less stock dilution than through a traditional IPO.

We support our clients through their transition from being a private company to becoming a public company, helping guide the management teams and boards of directors through the process. In the post Sarbanes-Oxley era, going public has become increasingly complex for companies. SRFK specializes in advising clients, specifically small to mid-tier companies, through the process and route to gaining access to the U.S. stock markets.

With the recently approved JumpStart Our Business Startups Act (JOBS Act), including a Crowd Funding provision, the landscape and alternatives for companies seeking to go public and raise money is likely to change even further. As companies continue to navigate through the continuous financial reforms, SRFK remains committed to working closely with clients to ensure they are ahead of the curve and that they are fully informed about the best and most suitable alternatives for them. SRFK’s highly skilled and experienced attorneys share a long-standing and strong relationship with the U.S. regulators and consistently keep clients up-to-date on relevant developments.