Shell Criteria

The third area to address when purchasing an OTCBB shell is the shell itself. Shells come in many different variations and there are certain nuances to the transaction that Buyers must become familiar with.

First of all you need to define the criteria for the purchase of the shell. Some shells can deliver as little as 51% of the shares outstanding and some as much as 99.9%. If you do not want to deal with having your attorney reversing the outstanding shares in the shell then I suggest you purchase a shell with as close to 100% delivery as you get. The more shares delivered the more expensive the shell is. A shell that can deliver 99.9% can cost between $700,000 and $1,000,000. If, on the other hand, your attorney has extensive experience in reverse shell mergers then he can affect the reverse stock split after you have acquired the shell. You can accomplish the same goal of retaining a high percentage of the shares and save yourself as much as $200,000 in the process.

Free Trading Shares

Some OTCBB shells can also include “free trading” shares that can be distributed to non-affiliate shareholders of the new company being vended into the shell. There is usually a premium paid for shells that can deliver free trading shares. There are some distinct advantages to getting a shell with free trading shares but that is a conversation for to have with your business advisor and SEC attorney.

Shareholders

You also need to determine if you want over 300 shareholders. If you are planning to grow your company and eventually would like to work your way up to a listing on NASDAQ or AMEX you will need a minimum of 300 shareholders. Therefore, it is advisable to find a shell with at least 300 shareholders.

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