Reverse mergers can be completed much faster than traditional IPO’s. In 2005, the SEC instituted some new rules that now make it mandatory for companies to disclose all information regarding the new company that has merged into the shell within four business days after closing. Most reverse mergers are completed within 30 to 60 days, providing the company that is being vended in has already completed their PCAOB audit. IPO’s, on the other hand, are subject to a number of obstacles to overcome. Some of the players and areas to be addressed include:

  • Underwriters
  • Underwriter’s council
  • Company SEC council
  • State Securities Blue Sky laws
  • PCAOB approved CPA firm
  • Registration Statement review by the SEC
  • NASD approval to trade the stock
  • Road Show to promote the offering

The IPO process can take from nine to twelve months to accomplish.

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