– A private company acquires control of, merges with and becomes an operating subsidiary of a public company (“shell”), concurrently with a capital raise.
– company becomes the officers and directors of the public company.
– A “Super 8-K” disclosure document, including two year audited financial statements of the private company, is filed with the SEC within four business days after the merger closing.
– Shares sold to raise capital are either registered for resale or become free trading 12 months following the closing of the APO under Rule 144.
– Shares typically start trading on the OTC Markets rather than the Nasdaq or the NYSE Amex.