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Interesting Goody someone showed me from Ihub
DIAS Holdings/Asia Forging is a reverse merger into JPCI. This is a background on why better growth companies oft use the reverse merger process on the OTCBB:
The New IPO Market: Reverse Shell Mergers
By Ralph Amato E-Commerce Times 02/15/08 5:00 AM PT
In years past, reverse mergers were associated with penny stock scams which were subject to manipulation by promoters. However, after several rounds of SEC rule changes and the collapse of the IPO markets in late 2000, OTCBB Shells emerged in 2003 as the de facto IPO marketplace for emerging growth companies.
The average size raised for an IPO (initial public offering) in 2007 was US$229 million, according to IPO Home. That translates into a market cap valuation averaging over $1 billion for companies that are going public.
The marketplace for IPOs has changed dramatically since 2000, when the Internet IPO frenzy imploded. Since that time, small boutique underwriters have virtually disappeared and the surviving larger firms such as UBS, Goldman Sachs and JPMorgan are underwriting much larger deals. Most of those deals are now based upon companies that can exhibit strong financial fundamentals inclusive of a proven track record and a history of earnings.
This leaves a huge gap in the marketplace for emerging growth companies that have a need to go public but do not possess billion-dollar valuations. So what are the alternatives for companies who wish to go public to expand their business and gain access to the capital markets? The answer may be to seek a reverse merger into an Over the Counter Bulletin Board (OTCBB) Shell.
For Emerging Growth Firms
In its simplest form, a reverse merger refers to the process whereby a private company merges into and with an existing public company to establish itself as a public company. Typically, the public company with which the private company merges has a shareholder base and some assets but is no longer a functioning business; hence, it is often called a "public shell."
In years past, reverse mergers were associated with penny stock scams which were subject to manipulation by promoters. However, after several rounds of SEC (Securities and Exchange Commission) rule changes and the collapse of the IPO markets in late 2000, OTCBB Shells emerged in 2003 as the de facto IPO marketplace for emerging growth companies.
Today, companies that reverse into an OTCBB Shell must adhere to the same stringent rules and regulations as set forth for companies who are listed on NASDAQ (National Association of Securities Dealers Automated Quotations), AMEX (American Stock Exchange) or the NYSE (New York Stock Exchange). The basic difference is that the emerging growth companies that trade on the OTCBB do not yet meet all of the listing requirements set forth by the stock exchanges: namely, the combination of earnings, assets, net worth, number of shareholders and minimum trading price for shares.
Public Image
The image of reverse mergers as a legitimate vehicle to go public has improved measurably in the recent years. The SEC no longer views reverse mergers as its redheaded stepchild. There are several key reasons for this assessment:
* Stringent new rules introduced by the SEC over the last five years; * SEC rule revisions passed in 2007 to assist small companies in raising capital; * Through its recent actions and commentary, the SEC now recognizes reverse mergers as a legitimate way for small companies to go public; * There are now more reverse mergers performed per year than there are IPOs; * Barrier of entry. The cost of an OTCBB Shell attracts companies that have revenues and earnings or substantial financial backers; and * Equity investments via PIPEs (private investments in public entities) will increase with the introduction of the reduced six month hold period on 144 stocks.
Advantages of a Reverse Merger
There are several advantages of the reverse merger for emerging growth companies. However there are three critical areas of importance:
1. Cost. Reverse mergers usually cost significantly less than an IPO. The total cost will be less than $1 million, inclusive of the cost of the shell, financial audits and attorney fees. However, there are alternatives that can reduce those fees substantially. If a company is generating revenues and profits and has an intriguing business model then it is possible to attract a shell owner who will take a combination of cash and equity or sometimes straight equity participation. This would substantially reduce the full cash outlay of approximately $600,000 to $900,000 to purchase the shell.
An IPO, on the other hand, is much more expensive, costing at least $2 million before factoring in investment banking fees, underwriting commissions and road shows to raise capital. With an IPO there is no guarantee at the end of the day you will go public. Your underwriter could back out of the deal for a variety of reasons: lack of interest, industry perception, market timing, etc. If your IPO is canceled, all of the money you have spent is literally down the drain.
2. Timeliness. If you are performing a reverse merger into a "shell company" you will need to have your audits finalized before you close on the shell. Why? Because the SEC mandates you have to file your 8K within four days from the date you file for the reverse merger. The entire process takes sixty to ninety days from the time you first file your 8K with the SEC. If time is of the essence and you need to get your deal to market sooner rather than later, then a reverse merger into an OTCBB shell is the best route to take. Because you are reversing into a company that is already public, you have eliminated the possibility that your company will not be publicly traded.
In contrast, a typical IPO takes nine months to a year to complete and, if problems occur, it can take several more months.
3. Market Conditions. Many times, management has a window of opportunity in which to take their company public. This could be the result of current market conditions or a perception that their company is in a hot, new multibillion-dollar industry. Whatever the reason, you know it is in your best interest and the company's to get public as soon as possible. The good news is that you can expedite the process of going public through a reverse merger much quicker than an IPO. Also, is once you have filed your 8K with the SEC you can then start the process of raising capital. Fund managers are more likely to invest in your company once they know they have the ability "cash out" through your public vehicle.
As the industry gains traction, you will start to see more and more companies using the reverse shell merger as their preferred choice for going public.
-------------------- Love 'em or Leave 'em either way I already did it. Posts: 801 | Registered: Jul 2006
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Detroit International Auto Salon Highlights One Stop Shopping for All
* Detroit International Auto Salon will consolidate and integrate all the Asian parts suppliers under one roof.
* One stop shopping service for all kinds of parts and components * Retail/Wholesale/OEM - Open to the public like a shopping mall. * Professional sales will guide you through your visit and answer any question. * Shopping with a shopper rider. * Open 365 Days a Year - Customers may come and search for parts and suppliers during weekdays or weekend with family. * Largest Salon for Wheels - From heavy duty truck, ATV, SUV to high end Aluminum wheels like chrom-plated wheels. * On Site Engineering Service- providing engineering consultation and design * Provide total manufacturing solution service from designing to global manufacturing and delivery. * Cost for traveling and time will be saved significantly by visiting Detroit International Auto Salon instead of walking around in Asian Countries and LCC
-------------------- Love 'em or Leave 'em either way I already did it. Posts: 801 | Registered: Jul 2006
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posted
Emptycontents....I will do you a favor and check out the salon. I am directly North of Detroit and Allen Park is South West of Detroit. Looks interesting. Allen Park is close to Dearborn which is FORD stomping grounds. From what I read, it sounds similiar to what Jeep in Toledo, OH has done. They took all the suppliers and gave them their own building and piled them all together to directly supply parts to the line. I know this venture sounds different but I go back to work Monday at Chrysler and will ask about it. I also note that its down the street from Detroit Metro Airport. (rather large airport). Give me a week.
Posts: 2367 | From: Detroit | Registered: Mar 2005
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JPC Capital Partners, Inc. Shareholders Vote to Complete Stock Purchase Agreement and Share Exchange With Componus, Inc.
THURSDAY , JULY 31, 2008 10:26 AM
ATLANTA, GA -- (MARKET WIRE) -- 07/31/08 -- JPC Capital Partners, Inc. (OTCBB: JPCI), based in Atlanta, Georgia, announced today that its shareholders had voted to approve changes to JPCI's certificate of incorporation and board of directors, both steps necessary to complete the stock purchase and share exchange agreement with Componus, a Nevada corporation ("Componus"). Chairman and CEO of Componus, Inc., Eric Huang, states, "I am both pleased and excited about the opportunities that will be created from our going public and trading in the U.S. equity markets. I personally feel that this will add value to our business model and create more opportunities for our future growth potential. We look forward to expanding our capabilities as a direct link in the global automotive marketplace."
The stock purchase and share exchange agreement provides for the acquisition of Componus by JPC Capital Partners, Inc. with Componus becoming a wholly owned subsidiary of JPCI. In connection with this acquisition, JPCI's shareholders approved today a reverse split of outstanding JPCI common shares on a 2 for 1 basis and an increase of the number of authorized shares from 95 million to 250 million. JPCI expects to complete the share exchange on Monday, August 4, 2008 and issue 89,000,000 shares of common stock in exchange for all capital shares of Componus. As a result of this share exchange, Componus shareholders will own approximately 87.25% of the total issued and outstanding common stock of JPCI. JPCI CEO John Canouse stated: "We are very excited that our shareholders have voted overwhelmingly to complete this transaction. We believe this transaction to be an effective strategy to increase value by allowing our shareholders an opportunity to participate in the economic growth surge happening in the Asian markets. Componus is an established company with significant assets and a tremendous revenue potential in the multi-billion dollar metal forging and automotive supply industry. We see this as a great opportunity for JPCI shareholders."
About Componus, Inc.
Componus, Inc. is a Nevada Corporation involved in the multi-billion dollar industry of providing the automotive, trucking, transportation, railway, and petroleum industries with raw, finished, and assembled components.
About JPC Capital Partners, Inc.
JPC Capital Partners, Inc. has been a licensed broker-dealer since its inception in 1999. It specializes in private placements and financings for public and private companies, as well as certain corporate finance functions, including business consulting and merger and acquisition services. For additional information, visit JPC Capital Partner's website at http://www.jpccapital.com or contact John Canouse at 770-521-1330.
-------------------- Love 'em or Leave 'em either way I already did it. Posts: 801 | Registered: Jul 2006
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quote:Originally posted by R1 Man: Emptycontents....I will do you a favor and check out the salon. I am directly North of Detroit and Allen Park is South West of Detroit. Looks interesting. Allen Park is close to Dearborn which is FORD stomping grounds. From what I read, it sounds similiar to what Jeep in Toledo, OH has done. They took all the suppliers and gave them their own building and piled them all together to directly supply parts to the line. I know this venture sounds different but I go back to work Monday at Chrysler and will ask about it. I also note that its down the street from Detroit Metro Airport. (rather large airport). Give me a week.
Man that would be great, make sure you PM me when you get back!
-------------------- Love 'em or Leave 'em either way I already did it. Posts: 801 | Registered: Jul 2006
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posted
Well as soon as these bids jump or the ask falls I think we will get some volume there are a lot of eyes on this that have been waiting for the merger.
-------------------- Love 'em or Leave 'em either way I already did it. Posts: 801 | Registered: Jul 2006
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