This is the second year in a row that I have witnessed softness in the marketplace for OTCBB shells during the month of May. I have now dubbed this the “May Effect”. Again there are more Sellers of shells than there are Buyers. This is partly due to the influx of new shells coming to market because of their inability to raise capital for their companies. The opportunities to raise capital this year have become more difficult in these economic times. Funding sources are very particular when it comes to funding a PIPE transaction. Companies must now have a sold history of both revenues and earnings and offer cheap valuations to attract capital. Startups are really feeling the pinch and finding it very difficult to get funded. So it is no surprise that companies that fail to attract much needed capital are deciding that it is too expensive to stay public and are opting to take their companies private through the sale of the shell.

This year the quality of the shells and the due diligence packages I have received have greatly improved. So if you are contemplating taking your company public this is by far the best time of year to do so. Just make sure you have a company that has expanding revenues, profits and a solid business plan for growth.

Last year excess shell inventory was swallowed up by smart Buyers and by late June prices returned to their normal levels. By mid summer Buyers were paying substantially higher prices through the end of last year. One shell closed for a $900,000 price tag in December, 2007.

If you are contemplating the purchase of an OTCBB shell give us a call. We can provide several options to fit your circumstances. Please contact Ralph Amato at Ventana Capital Partners at either 858 729 007 or Ralph@ventanacapitalpartners.com .

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