1. Are you going to pay cash for the shell and if so how much have you allocated for that purchase?

OTCBB shells are priced from $500,000 to as much as $900,000. You are probably asking yourself why there is such a huge pricing disparity. The reason is because there are many variables when it comes to buying a shell. Some of those variables include the number of “finders”. There are many people out there that purport to be representing the Seller of a shell.

In most cases this is partially true. The seller may have given the “shell profile” to a number of finders. This sometimes leads to a daisy chain of finders which increases the price of the shell. You must also consider the ancillary costs of the transaction. You will have to pay for a PCAOB audit prior to purchasing the shell and you will need to hire an attorney that specializes in SEC issues. Depending on the size of your audit and the complexity of the shell transaction you can expect to spend and additional $50,000 to $100,000. Other additional costs can include a private placement memorandum to raise additional cash via a PIPE transaction. I always caution my clients to play it safe and earmark approximately $1,000,000 for the entire transaction.

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