Business week recently ran an article on reverse mergers. What this amounts to are Chinese companies looking for access to U.S. capital markets via a back door entry. Apparently the front door can be very expensive.
According to the article they find a shell company (some defunct bb listed stock), get capital backing from a money manager after agreeing to be acquired by the defunct U.S. entity. They are acquired, capitalized and then bingo they are an American listed company. Under this approach you do not have to list. The defunct company is already listed.
Some of these have worked, some have been frauds.
Some tell tale signs that this is going on are defunct companies using a China name:
(I stump my toe a bit on this one since they changed their name to Media Exchange Group but they do retain the name China when they reference P/K/A.)
Bringing delinquent SEC filings current (type in CWLC in above link then click on filings). If you go so far as to look at the first footnote you will see they are looking for acquisitions (now how in the world does a company beyond broke acquire something unless something else is going on). Also why go to the filing expense (and believe me these filings can be a pain) unless something is up. They filed their 10K for 2007 in December 2010 and their first 10Q for 2008 in January 2011.
A release by the company states that all filings will be current by mid-February:
As to whether this is a reverse merger is anyone’s guess. I have googled (our favorite company) the CEO and he does have experience with publically held companies—a golf affiliated place named Divot.
I am in for 200,000 shares. If I am correct that something is going on (be it a reverse merger or something else) then hooray. If I am incorrect then I am out financially.
P.S. I played basketball for somewhere around 40 years and the court was full of whizes; public forums are full of them as well; fortunately we are blessed with an ignore button here; unfortunately no such thing exists on a basketball court but the treatment should be the same. When you reply they got ya--don't waste your time. Right or wrong have some fun with a company like this.