What Is A Reverse Merger

A reverse merger is a method by which a private company can achieve a public listing. In a reverse merger, a private company merges with or ‘reverses into’ an already publicly listed entity. This entity has no assets or liabilities and is therefore referred to as a ’shell’. The shell is no more than a corporate structure and by merging into such an entity, a private company becomes a public company.

There are several types of reverse mergers such as stock for stock or stock for assets.  In a stock for stock transaction, stock of the public company is issued in exchange for stock in the private company.  The private company can be a wholly owned subsidiary of the public company or the private company can be completely absorbed by the public company.  In a stock for assets transaction, stock is issued only for certain assets of another company or individual.

In our reporting, we hope to illustrate many such examples in their diversity.