Thread by @billsstocks1

#NavigateTheOTCJanuary

1/27/21 EDITION - REVERSE MERGERS

You hear the term a lot - reverse merger, but do you actually know what they are and how they play out. A reverse merger is when a public company takes over a private company so the private company doesn't have to take

steps to go public. Many penny stocks make excellent reverse merger candidates because it doesn't cost much to purchase the shares of the stock. @WildRhino posted an excellent pinned tweet on the steps of #OTC #Stocks. I will go through each step in some detail:

1) CUSTODIAN APPOINTMENT - This is when someone is appointed to get the stock prepared for a merger and to do the intermediate steps. Clark County, NV has cases where custodianship is granted.

2) CUSTODIANSHIP GRANTED - This is when the court (like Clark County for NV corps)

officially transfers custodianship to the appointee. Buying during phases 1 and 2 may very well require patience, but some big gains can be made after a wait. $DROP had custodianship granted last summer and was slightly under a penny then.

3) REINSTATEMENT - The stock the

custodian takes over has a status of revoked (you can see company status on the state's secretary of state website, like NVSOS). Once all paperwork is done, the state reinstates the company. The stock usually sees a big pop. Recent reinstatements include $CSOC, $SRSR, and $AZFL.

4) FILINGS - After reinstatement, pay attention to the green company updated profile checkmark on OTCMarkets (like $APTY) and quarterly and annual filings from the date of the last filing until now (like $NECA). You can check for filings on the disclosure tab on OTCMarkets.5

5) ATTORNEY LETTER - After filings, the stop sign will become a yield sign. Big gains can be made when steps 3 through 5 hit. An attorney letter with respect to filings will be submitted on OTCMarkets. @EdgarInsider Twitter account alerts stocks who file and submit atty letters.

6) PINK CURRENT - Once the attorney letter is submitted, the OTCMarkets status goes from yield to pink current, which means all filing information is up to date.

7) PREP TICKER FOR MERGER - This means cleaning out anything from the old shell of a company so it's associated with

the new company.

8) FIND MERGING CANDIDATE - A custodian will find a good private company who would like to purchase the shell. Many private companies can purchase it for a good deal. Once they take over, it gets fun. News hits and possibly follow up stories for a nice uptrend!

Once again, I am indebted to @WildRhino for putting together and pinning the steps. Following a stock and seeing which step it's on can help determine when to buy and when to sell pops. Or you can hold for gold! You make the decision and the money! Good luck to all! #stocks #otc