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 as 99.9% delivery of the issued and outstanding common and preferred shares of stock. The lower the delivery the lower the price of the shell. As of this writing a shell with 51% delivery will cost between $550K to $650K. A 99.9% delivery shell complete with non affiliate shares will cost between $750K to $850K. So what is the difference?
The 51% shell will require, in most cases, a reverse split of the stock along with the reverse merger. This usually involves a significant amount time and attorney fees. You will have to file an 8K and later a Proxy or Information Statement with the SEC. If you choose the new methodology of contacting your shareholders via a postcard you will have to wait a minimum of 40 days from the day you mail the postcard notice.
The 99.9% shell usually involves a forward split versus a reverse split. Certain states of incorporation do not require a Proxy or Information Statement be sent to shareholders when you performing a forward split of the stock. The reason is that the Company is issuing shareholders additional shares versus taking shares away from them. Secondly, if the Company and non affiliate investors have purchased 99.9% of the shares the likelihood of a shareholder complaint is usually slim and next to none.
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