APO is a combined Reverse Merger (Going Public Event) with simultaneous PIPE (Financing Event).

APO Process

Through a joint effort with our strategic broker-dealer partners, HFG offers select clients an alternative to the IPO. Utilizing our APO process, HFG assists private companies in going public by simultaneously completing a reverse merger transaction with a private placement of equity capital (PIPE).

The net result for the private company is similar to a company completing an IPO, in that upon the completion of the transaction it is a publicly listed company with newly raised equity capital, institutional investor support and investment bank sponsorship. The APO services are designed to offer our clients some of the best aspects of the IPO while still enjoying all the benefits that a traditional reverse merger has over an IPO. Highlights and advantages of HFG's APO services include:

• Becoming a public company and raise money in one transaction
• Regulatory filings occur after the financing and going public are completed, thus avoiding IPO-related risks
• Investment bank acts as placement agent, bringing post-closing market sponsorship
• Market validation through institutional financing validation
• Much faster than an IPO - much less risk
• Higher valuations than raising money as a private company
• Flexibility in amount of capital that is raised, with a long term process and strategy (including post closing) to minimize issuer dilution

For a company that wants the benefits of being public without needing to immediately raise equity capital, a stand alone reverse merger may be a good solution.

APO Valuation Spectrum

Investors in an APO will pay a premium to private equity valuations, but expect a discount from projected public market valuations.

APO

Below is a diagram setting forth the steps of a typical APO transaction:

	Public Shell The transaction starts with a clean public shell. This shell has $0 assets, $0 liabilities, 500 shareholders.
	Private Company The private company — the operating business — has one shareholder.
	Newly Issued Stock = 95% Public acquires all the stock of Private from its sole shareholder. The compensation paid is newly issued stock in Public, which typically ranges between 90-95%.
	501 Shareholders The Result: Public now owns 100% of Private. The previous owner of Private now owns 95% of Public.
	502 Shareholders Example: Institutional investor invests $20M into parent for 20% of the merged company or a $100M post money valuation. 12,500,000 shares issued and outstanding and 502 shareholders after APO:
	1 shrhlds of ABC = 9,500,000  76% 500 shrhlds of XYZ = 500,000  4% 1 investor = 2,500,000  20%

Why Choose HFG?

Strong Track Record

HFG Reverse Mergers*

* Note: Representative Transactions

Deal Direct
We maintain a large inventory of public shells that we control as principals. As we do not act as intermediaries our transactions are conducted on a principal to principal basis.

Most Knowledgeable
For the past fourteen years, we have conducted and participated in seminars on the reverse merger process. We have instructed hundreds of attorneys, CPAs and professionals about the process.

Capital Raising
We have the ability to invest our own capital in our clients’ transactions. We invest side by side with our institutional partners, and offer a third party institutional fund that has been set up to invest in HFG reverse merger transactions.

Turnkey Solution
We have the people and experience to handle every aspect of the reverse merger process so you can stay focused on your business.