If you have never taken a company public then you are clueless as to the amount of time management will devote to this process. The first step is the decision process to move forward with a public offering. Then there is the hiring of a qualified SEC attorney, a PCAOB qualified CPA firm and of course, the underwriter. You have basically committed yourself to spending a year of your life to get your company public instead of spending that time more productively growing your business. It is sort of ironic that the time you need to dedicate towards increasing your revenues and profitability is instead spent paying enormous sums of money to get your company through the SEC registration process and running around the country wooing Wall Street to buy your deal. If a company does not have a strong management team then the year spent away from building their business can adversely affect their future. The road show alone can take several key executives away from the company for a period of several weeks.

Reverse mergers require significantly less time than traditional IPO’s. First of all the reverse merger transaction is a lot less complex and is usually completed in 30 days. There is no SEC review except for a mandatory 8K filing four days after you have consummated the reverse merger and you are trading. A qualified CFO or CEO can handle all of the areas of this transaction with his auditors and counsel. The SEC rules governing companies going public are the same whether you go the IPO route or the reverse merger. At the end of the day you end up at the same place. Its just a decision on how you want to get there.

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