Public Shells

Reverse Mergers with  Public Shells

A public shell is a company that has shareholders but has no or minimal assets or earnings.

There are different kinds of public shells:

• Shells that are not trading: These shells have no ticker symbol.

• Pink Sheet Trading: These shells are quoted and have a stock symbol symbol, but because they are not SEC reporting companies - that is they are not required to file annual reports on Form 10-K, quarterly reports on Form 10-Q, periodic reports on Form 8-K and other required SEC reports - they can ONLY trade on the Pink Sheets.

• OTCBB Trading: These companies have a stock symbol, and are also reporting companies and that have a bid & ask and are on the OTCBB.

In a reverse merger with a public shell, a company merges with the public shells and your company is deemed to be the surviving company. You and your shareholders end up with a significant majority, but not all, of the issued and outstanding stock after the merger closes.

Pink Sheet Trading Shells are entities that, if you recognize the limits of Pink Sheet trading and obtaining investor financing as a non-SEC reporting, Pink Sheet company. In many cases, however, if you need a ticker symbol immediately and then do all the SEC filings necessary to become an SEC reporting company, you can subsequently move up to the OTCBB.

Also remember, in reverse merger transactions with all three types of Shells, there is risk. The people with a lot free trading stock are old shareholders and promoters of the Shells. This may cause problems in maintaining a reasonable and rising price for your stock after you start trading.

A publicly traded company is a very valuable and powerful tool and something to strongly consider.

There are several types of public shells which are all very expensive. They usually have 100 or more shareholders and a lot of shares in the float when the stock price goes up these 100 shareholders inevitably sell the stock and the price declines. This is far more expensive than the up front price paid. If you are seriously considering becoming a public company it is very important to understand the concept of the public float.

There are also non trading public shell companies.

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