1) A shell company can have no assets and no business, but there are no debts and legal proceedings, which is the so-called "clean" shell, otherwise it will be unfavorable to the acquiring company.
2) The shell company's listing qualification must be kept intact, including reporting its financial resources and operating conditions on time according to the requirements of the SEC, otherwise, the US securities regulatory authorities can cancel its listing qualification.
3) The company must have enough "public shares" and "public shareholders" to be active after the merger. The so-called "public" refers to the shareholders who bought public shares when they first went public. After finding a good shell company, you can go through the merger and acquisition procedures. Among them, it takes a long time to audit the financial statements of the two companies. Next, the two sides reached an agreement on the merger plan and determined the isosceles triangle of equity distribution and payment method.
In the process of determining the merger plan, we should pay attention to the following matters:
1) Equity distribution
The shell company is a listed company, and the listed company has public shareholders, otherwise it is not a listed company, and the reverse takeover cannot acquire 0/00% shares of the listed company. It is a domestic enterprise that is optimistic about the market outlook (sufficient subject matter and good performance), and the higher the share of listed companies.
2) the way of M&A
The way of acquisition and merger is a kind of "reverse acquisition". The acquired company was originally a shell company, but because the shell company is a listed company in the United States and cannot disappear, the shell company continues to exist (the name is acceptable), but the modern equity is handed over to the original shareholders of the acquiring company, and the acquiring company loads its assets and business into the shell company and becomes its subsidiary.
3) Determine the proportion and timing of the assets and business of the acquisition company entering the shell company. (See attached table for other listing requirements)