Regardless of how it is described, the heart of a reverse merger involves the shareholders of a private operating company exchanging their shares for a large majority of the shares of a public company. Although the public company survives the merger, the private operating company’s shareholders gain controlling interest in the voting power and outstanding shares of stock of the public company. Thus, the economic substance of a reverse merger (sometimes referred to as a “reverse takeover” or “reverse IPO” and also sometimes described as a private company acquiring a public company) is that the private company essentially becomes public. It is generally considered to be an alternative to the traditional IPO process to bring a company public. For more information, read this SEC discussion. See also SPAC.