I just got back from my whirlwind trip to Manhattan. I had the opportunity of speaking with several attorneys, investment bankers and companies that were seeking to go public. The trip was very upbeat and most everyone I spoke with was very optimistic about the prospects for 2007. Most are preparing for next year by increasing their staffs and everyone is trying to seek out companies that would make good candidates for reverse shell mergers.

Everyone agrees that the quality and size of the deals they were involved in this year were much better than previous years. Most believe this is in direct correlation to the cost associated with the increased pricing of shells.

As I have mentioned in my previous blogs, I believe that reverse shell mergers have become the de-facto IPO marketplace for micro cap companies. As this segment of the industry has continued to grow it has attracted bigger and better companies that are seeking alternatives to the traditional IPO. In the future we will start to see companies, which could have qualified for a traditional IPO seven or eight years ago, choose to go public via the reverse shell merger route. The companies I have seen recently that are purchasing OTCBB shells have a real business with revenue growth and pretax earnings.

OTCBB Reverse Shell Mergers have spawned a sizable cottage industry that includes investment bankers, broker dealers, attorneys, accountants and consultants that specialize in bringing micro cap companies public. On the investment side you have wealthy investors, fund managers and hedge fund participants who are funding PIPES for these types’ deals. It is interesting to note that the average company that has completed its reverse merger has a market cap of over $50 million.

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