The conference had several speakers addressing issues concerning Reverse Mergers and Form 10 shells. Form 10, or “virgin shells” as they are sometimes called, consist of a blank check S1 that has been reviewed by the SEC. The Form 10 shell does shorten the SEC review process – but not by much. A company still has to back into the Form 10 shell and go through the entire review process with the SEC, find a minimum of 30 shareholders, and apply to FINRA to gain trading status. This process will cost somewhere between $150K and $200K plus audit fees.

By comparison, a reverse merger into an OTCBB shell is quicker but quite a bit more expensive. Costs can run from $550K to almost $1MM. Determining factors on the best vehicle to use to go public depends upon several different factors. If your company is a startup, then an S1 registration statement or Form 10 shell is probably your best choice. If you are established and have both revenues and profits and there is a good possibility of getting your company funded then a reverse merger might suit you better. If you have a foreign company and you are trying to gain entry into US markets a reverse merger is definitely the way to go. It really all depends upon your circumstances.

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