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Reverse Merger into a Clean Public Shell
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Alternative to an IPO Public
Offering?
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The Problem
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Filing an offering with the SEC
and waiting for it to become effective can take weeks, months, or even
over a year. |
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The Shell Solution
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Some people have tried to make
an end-run around the securities laws by buying a "clean public
shell." |
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What is a "shell?"
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A public shell is an inactive
public company. A shell is created when a public company becomes inactive. |
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The company is then public but
generally has little or no assets. |
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The end-run around the
registration provisions of the securities laws occurs when an operating
company wishing to go public merges with the shell. |
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The operating company then has
publicly traded stock. |
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Advantages:
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Formerly, the operating company
got
public stock in 2-3 weeks. The company did not have to wait months to get
through the SEC. Now, SEC Release 33-8587 makes a company merging with a
shell make a complete filing with the SEC in four days after the
merger. |
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Disadvantages:
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The public shell may have a
"social disease" -- hidden liabilities, hidden warrants that
dilute the value of the operating company's stock, unsavory connections,
or other problems. |
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Merging with a shell has a
certain stigma. |
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The shell merchants may want a
large sum of money -- I have heard of as much as $500,000, and a large
piece of the stock. |
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No new money is raised. |
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To buy or sell a shell:
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Contact us at the e-mail
address below. |
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Other alternatives to buying a shell:
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The
Instant IPO |
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Going public on in a foreign
market |
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We just happen to have a shell
to sell you --
mailto:lux.investor@gmail.com
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