BAD SHELLS & GOOD SHELLS

BAD SHELLS

I don’t like most reverse merger transactions.

• Non-reporting public shells may have nasty skeletons in the closet that will come out to haunt you after you close the reverse merger.

• Many public shells have shareholders and promoters who will dump all their shares into the market after the reverse merger closes, killing your stock price. 

NOTE:  Even shells that report to the SEC may have problems that could be hidden to you.  For example, some companies have gone public alleging they have real business plans when the true intent was to create a shell company.  And until the SEC changes rules concerning resales of restricted securities in any company that was formerly a shell company, merging with a shell could adversly affect future financing transactions.

Why do people buy these shells? 

Yes, I know.  OTCBB shell prices have come down.  But they are still in the 200's.  So they are still 100's of thousands of dollars more expensive than a Go Public Direct Transaction.  And not necessarily faster - although they can be.  But not more certain.  I've shown that.

In comparing the timing of the two transaction, you must be fair.  If the shell trades on the OTCBB, you must still prepare a full disclosure filing, including your audit, in connection with the reverse merger.  So you cannot avoid the time it takes to do that.  And you have to compare the time it takes to do shell due diligence on one or multiple shells and then close the transaction to the time it takes the SEC to review your filing in a Go Public Direct transaction to make a fair comparison.  With a little luck, the SEC process in a Go Public Direct transaction can be as little as 13 days, if you get a no review.

In any event, in comparing, you still have the cost issue to deal with.  And shell transactions, even with SEC reporting shells, still have the problems described above.

Pink Sheet Shells at a lower cost than Bulletin Board Shells seem like an attractive alternative.  But they are not.  They are still more expensive than a Go Public Direct transaction.  You only end up on the Pink Sheets.  And you may have to stay there because you’ve inherited other problems not found in Bulletin Board Shells.  Bogus stock sales.  Years of unfilled SEC reports.  Or worse. 

Virgin or Form 10 Shells seem like a great deal.  They’re cheap. They do have a purpose.  But make sure you ask a competent SEC attorney before you buy one.  Some people may be misrepresenting what these shells can do for you and may not fully explain what types of transactions they are actually suited for.

Remember:   After you pay for the shell, you still have all the work and expense of a Go Public Direct transaction to get a ticker symbol.  

Think you've found the perfect shell deal?

If you believe you have found the perfect shell and you don’t need us, call me and give me the details of any proposed shell deal that’s being pitched to you.  In less than 15 minutes, I’ll prove that you’re much better off hiring us and Going Public Direct.

THE ONLY GOOD SHELL DEAL

I'm not opposed to every reverse merger transaction.  But my suggestion to you is: Do not go public with a Reverse Merger unless your deal has:

• a legitimate FUNDING source
• Who brings the shell to the table
• And you get the money when the reverse merger closes, not after.

I have been the attorney in many legitimate shell transactions. There was always a legitimate funding source involved. The only legitimate funding source is a FINRA registered broker/dealer and their investors. No other type of firm that can legally raise money for you.

The broker/dealer must be the one who brings the shell to the table. That way you know the shell is as clean as it can be. The broker/dealer will make sure it's clean because it's their money at risk in the deal.

The funding MUST come in when you close the deal. Do not accept a promise that "We'll put the money in or we?ll raise you the money after the deal closes." I call these Tooth Fairy shell transactions. The same people that still believe that the Tooth Fairy leaves money under their pillow believe the money will show up after the reverse merger closes.

There is no Tooth Fairy.

There is no money that shows up after the reverse merger closes.

If you don't have all of these essential elements in your proposed reverse merger transaction, DO NOT DO THE DEAL.

Save yourself time, aggravation and money: LET US SHOW YOU WHY WE ARE THE FIRM TO HIRE TO TAKE YOUR COMPANY PUBLIC