Formerly known as Data Technology Corp., Photonics was a manufacturer of various computer peripherals including keyboards. In 1994, it boasted $400 million in sales, but took in the late '90s it began falling and never recovered as computers and their accessories grew drastically more common and less expensive. At last report, the company consisted of two employees and not much else, which would account for its share price of about 12 cents. In other words, it was ripe for a reverse merger by REpipeline.

"We felt to be able to be a good accumulator of assets, aggregating products together in one site, we really needed to be public," REpipeline Chief Finance Officer Chip Langston tells GlobeSt. "So we started discussions in the spring about merging with Photonics in order to fast-track our public exposure.... Photonics is public, and we're now part of Photonics."

As part of the deal, Photonics shareholders will own 15% of the newly formed company. Such reverse-merger activity is prevalent in today's roller-coaster market, says Langston, particularly for smaller companies looking to go public. "It's probably more common than you might think ... its got pros and cons," he says. "If you're not immediately trying to raise $50 to $100 million, which you really need to do with a big IPO with a major investment-banking firm, and if you're like us and primarily trying to use your paper for acquisitions, a reverse merger is a good way to go."

Langston says that REpipeline is trying to raise only $1.5 to $2 million and is using common stock for acquisitions. He says the move is a "risk" because of today's unsettled conditions, but that the company's smaller size makes that risk more manageable.

"I would be very uncomfortable if I needed to spend $10 to $100 million on something before I knew if it was even going to work," he says. "But we are not commercial real-estate brokers, not commercial real-estate mortgage companies. We are not any of these guys. We are the conveyer. So therefore we've got very little overhead, very little fixed costs, and so we break even with (as few as) 5,000 customers."

REpipeline, in betatest mode for several months, officially launched its Internet site this week. Now that the site is up and running, Langston says, the company is offering its services for a $22.95 monthly subscription, which provides commercial real-estate players access to a host of services. The site is also developing a secured online method for paperless transactions, which are in high demand throughout the real-estate industry.

Instant Insights /

REpipeline Takes Back Road To Public Status

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