Growth Mergers went public in 2002, trading on the Pink Sheets and raising more than $2.3 million in capital to fund its adult operations, which included six websites. But many of the company’s principals and officers had sold off their shares and resigned by early 2003. As of this posting, Growth Mergers’ shares were trading at 60 cents under its symbol, GMGI.
The deal with Neah was a reverse merger, meaning Growth Mergers will cease to exist and Neah will be the surviving company. In essence, the whole point of the deal was to allow for wider investment in Neah through Growth Mergers’ Pink Sheets listing.
Officially, Growth Mergers is the acquiring company, but it will now change its name to Neah Power Systems and change its trading symbol to reflect the new name.
The companies quoted in the Pink Sheets tend to be closely held, extremely small and thinly traded. Most do not meet the minimum listing requirements for trading on a national securities exchange, such as the New York Stock Exchange or the NASDAQ. The SEC sees companies listed on Pink Sheets as among the most risky investments.
Neah CEO David Dorheim said using a reverse merger is less expensive than a traditional Initial Public Offering and has less stringent requirements, but added that the combined company will now take the necessary steps to have its stock listed on NASDAQ.
Neah is looking to dramatically increase investment to expand its development of micro fuel cells to power laptop computers. Neah will use the money to have its cells, which last longer than the rechargeable lithium ion batteries used in today’s laptops, ready for commercial markets by late 2007.
