Preliminary Preparation

Identify a Target Company

We will find a suitable shell company for the reverse takeover. Shell companies are typically publicly listed but have minimal operations, low market capitalization, and relatively simple financial structures.

We analyze the shell company’s shareholding structure, debt levels, legal disputes, and other critical factors to ensure it meets the acquisition requirements.

 Assess Feasibility

We conduct a comprehensive assessment of the reverse takeover’s feasibility. This includes evaluating the target company’s value, the total acquisition costs, and potential risks.

We consider factors such as industry outlook, market demand, and the competitive landscape to determine if the reverse takeover will help achieve the company’s strategic objectives.

Design of Transaction Structure

Acquisition Method

We determine the specific mode for the reverse takeover. Common methods include asset injection and equity swaps:

Asset Injection: The acquirer injects its high-quality assets into the shell company to achieve a public listing of those assets.

Equity Swap: The acquirer exchanges its own equity for the equity of the shell company to obtain control of the listed entity.

Pricing Strategy

We calculate a reasonable acquisition price by evaluating factors such as the shell company’s market value and asset status, as well as the acquirer’s asset value and future growth potential.

We utilize various valuation methods to determine the price comprehensively, such as the market approach, income approach, and asset-based approach.

Financing Arrangement

If additional financing is necessary for the completion of the reverse takeover, there are other methods to raise capital, including bank loans, bond issuance, and equity financing. We will develop thorough financing plans for our clients and evaluate the costs and risks of different financing options.

Due Diligence

Financial Due Diligence

We conduct in-depth reviews of the shell company’s financial status, including its balance sheet, income statement, and cash flow statement.

We verify the authenticity and accuracy of all financial data to assess the company’s asset quality, debt levels, and profitability.

We identify potential financial risks, such as debt disputes, tax liabilities, and accounting fraud.

Legal Due Diligence

We review all legal documents and assess the regulatory compliance of the shell company. This includes examining its articles of association, major contracts, and litigation history.

We evaluate potential legal risks, including pending or threatened litigation, regulatory penalties, intellectual property disputes, and contract breaches. This way, we ensure the entire reverse acquisition process is structured to be lawful and compliant.

Business Due Diligence

We understand the shell company’s business model, market position, and competitive advantages.

We analyze the potential synergies between the shell company’s business and the acquirer’s, and evaluate the feasibility and challenges of post-acquisition integration.

Negotiation and Contract Signing

Negotiation Strategy

We develop a comprehensive negotiation strategy that clearly defines goals and the bottom line for our clients.

We will form a professional negotiation team, including experts in the financial, legal, and business fields.

Contract Terms Negotiation

We negotiate all terms and details of the reverse acquisition agreement. Key items include the acquisition price, payment method, delivery conditions, performance commitments, and liability for breach of contract. This way, we ensure all contract terms are fair, reasonable, and reflect interests of our clients.

Contract Signing and Announcement

We will facilitate the signing process of the formal reverse takeover agreement upon reaching a consensus between the parties.

We will also issue public announcements and disclose all relevant information promptly, in strict compliance with securities regulatory requirements.

Integration and Subsequent Development

Business Integration

We help to integrate the operations of the acquirer and the shell company to optimize resource allocation and achieve synergies for the combined entity, by implementing a unified business development strategy to expand market share and enhance overall competitiveness.

Financial Integration

We align financial systems by standardizing accounting policies and financial management processes between the two companies. This will enable more optimal capital management to improve capital utilization efficiency and mitigate financial risks.

Management Integration

We can help with restructuring the management team and organizational architecture to improve operational efficiency. While establishing a robust internal control system to strengthen corporate governance and risk management.

Subsequent Financing and Development

We work with our clients to pursue subsequent financing initiatives, such as private placements or bond issuances, in line with strategic development objectives and ensure the company’s long-term and stable growth.