Everything you need to know about Reverse Shell Mergers by Ralph Amato
Shell mergers increased by 5% in 2007 to 222 completed transactions. Collectively, reverse mergers for 2007 were valued at $8.36 billion, a 14% increase over the previous year. It is this writer’s opinion that once you have read my series on the Shell Mergers for 2007 you will come to the same conclusion I have: [...]
The SEC recently stated in a release concerning “footnote 172 shells” that a start-up company does not necessarily fit the definition of a “shell company”. When a publicly traded OTCBB company files with the SEC as a “shell company” or subsequently checks the box as a shell company on its 10Q or 10K filings then [...]
Promoting Your New Public Company
This is a great time for the Buyer to start getting the word out to the investing public about their company. The best way to do this is to hire an investor relations (“IR”) or public relations (“PR”) professional. Personally, I prefer the PR route versus the IR.
Investor Relations Firms
There are [...]
Post Closing of the OTCBB Shell
After the Buyer has closed on the shell an 8K (or super 8K as previously discussed) will be filed with the SEC by counsel. If the Buyer is performing a reverse split of the stock along with the reverse merger then counsel will also be filing either an Information or [...]
Closing on the Shell
Upon the closing of the shell the Buyers SEC attorney will have received all of the due diligence on the shell. The attorney will have also received all of the stock certificates with signed stock powers (usually with gold medallion guaranteed signatures) from all of the Sellers.
The escrow agent releases the funds [...]
Examination of Shell Due Diligence by Buyer
Examination of the shells due diligence is where the rubber meets the road. This is the point that determines whether you are going to proceed with the transaction or reject the shell. Your SEC attorney will perform a complete due diligence review. If you have hired [...]
By Ralph Amato
Preparation of Shell Due Diligence by Seller
After your initial review of the shell you and your SEC attorney will perform a complete due diligence review. For Ventana Capital Partners clients we use a ten page due diligence questionnaire that we have the Seller complete before we ever approach a Buyer. We [...]
By Ralph Amato
Preliminary Review of the Shell Corporate Profile
Once the Buyer has received a copy of the Shell Corporate Profile he will perform some preliminary due diligence before deciding to move forward with the transaction. If the Buyer is represented by an experienced consultant then the preliminary due diligence will be performed by them. [...]
By Ralph Amato
The Shell Corporate Profile
The shell corporate profile is a one page overview of the shell you are seeking to purchase. Here is an example of the information it should contain:
Corporate Profile
Name of Corporation:
State of Incorporation:
Date of Incorporation:
Purpose of Corporation:
Number of Shares Authorized:
Number of Shares Outstanding:
Number of Shares Deliverable:
Outstanding Options or Warrants:
Reporting as [...]
By Ralph Amato
Purchasing the Shell
The protocol for purchasing an OTCBB shell is as follows:
Buyer will receive a “Corporate Shell Profile” from the Seller or Sellers Representative.
After a successful review of the shell by Buyers and his SEC attorney Buyer will enter into Letter of Intent (“LOI”) for the purchase of the shell.
Buyer will remit a [...]
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