Everything you need to know about Reverse Shell Mergers by Ralph Amato
When contemplating the purchase of an OTCBB shell you first need to analyze what type of shell best suits your company. Shells come in a variety of structures and in many cases the structure will determine the pricing of the shell.
You can purchase a shell with as little as 51% delivery and as much [...]
By Ralph Amato
Shareholders
The number of shareholders in the shell you are purchasing may or may not be an issue. If you purchase a manufactured shell (a shell that has recently been approved for trading) most likely you will have less than 50 shareholders. This does not pose an immediate problem but if you [...]
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 [...]
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
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
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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