Public Shell Defined
A Public Shell is a Company that possesses a shareholder base of public shareholders but minimal or no assets and minimal or no operations. The operating business that once occupied the Public Shell may have gone private or simply ceased operations. Public Shells may also be referred to as Public Shell Companies, Shell Corporation, Bulletin Board Shells, Pink Sheet Shells, AMEX Shells, etc. The Securities and Exchange Commission, SEC, has made numerous regulatory changes in recent years regarding Public Shells, consequently, an experienced securities attorney is vital to the success of any reverse merger with a Public Shell.
There are several varieties of public shells that work well for private companies going public via reverse merger.
Pink Sheet Shell, Trading, Non-Reporting
A trading Pink Sheet Shell is a Public Shell Company with minimal or no assets, and no operations but still possesses an active 15c2-11, hence it is piggyback qualified and can be quoted on the Pink Sheets. This type of Public Shell Company possesses a shareholder base and ticker symbol and can be a perfect vehicle for a reverse merger with a private company assuming it is free of debts, liens and encumbrances. In order to establish the quality of the Pink Sheet Shell, and in order to discern if it possesses any liabilities, a securities attorney or securities law firm is generally hired to conduct due diligence.
The Non-Reporting Pink Sheet Shell is not required to file quarterly or annual reports with the SEC such as 10Q’s, 10K’s, 8K’s, etc. A Non-Reporting Pink Sheet Shell may become a Reporting Pink Sheet Shell by filing a Form 10 Registration Statement with the SEC and then filings all mandatory quarterly and annual reports as appropriate.
Pink Sheet Shell, Trading, Reporting
A Reporting Pink Sheet Shell is identical to a Non-Reporting Pink Sheet Shell in the respect that is possesses a shareholder base, ticker symbol and active 15c211 and is piggyback qualified. However, it is required to file quarterly or annual reports with the SEC such as 10Q’s, 10K’s, 8K’s, etc. Because a Reporting Pink Sheet Shell is basically held to the same reporting requirements as a Bulletin Board Shell, it is much easier for this variety of Pink Sheet shell to move to the OTCBB.
Bulletin Board Shell, Trading, Reporting
Generally speaking, Trading Bulletin Board Shells are most commonly used by private companies going public by reverse merger with a public shell. Trading Bulletin Board Shells possess a shareholder base, ticker symbol, minimal assets and no operations. The term Reporting Bulletin Board shell is redundant because unless this type of Public Shell is fully reporting and current in all SEC reporting requirements, the Bulletin Board Shell is quickly delisted by the SEC and then ceases trading upon losing its active 15c211 or piggyback status. In the event this occurs the Public Shell must bring all delinquent filings current with the SEC and submit a new 15c211 Application to FINRA through a Market Maker.
Upon location of a Trading Bulletin Board Shell that appears suitable for reverse mergers, securities attorneys undertake due diligence to establish the entire operational history of the Company and to ensure there are no undisclosed debts, liens or encumbrances.
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