Clean Shell/Public Shell

Clean Shell/Public Shell

A reporting company. It has its filings current. It doesn't have debt. There are no lawsuits, nor reasonable prospects of a lawsuit against the company. The insiders retain control of 80%-90% of the issued shares.

Public shell is a viable alternative to going public. In more formal circles they can be referred to as public shell company or public shell corporation.

Public shell transactions are a widely accepted, alternative mean for a private company to go public. A necessary component to a completed reverse merger transaction is the public shell. The public shell is a publicly listed company with no assets or liabilities. It is called a "shell" considering all that exists of the original company is its corporate shell structure. By merging into such an entity, a private company becomes public.

The primary benefits of doing a Public shell, as opposed to an IPO, is the following:

• You will receive a higher valuation for your company.
• The company does not require an underwriter.
• The costs are significantly less than the costs required for an initial public offering.
• The time required is considerably less than for an IPO.
• IPOs generally require greater attention from top management.
• There is less dilution of ownership control.
• While an IPO requires a relatively long and stable earning history, the lack of an earning history does not normally keep a privately-held company from completing a reverse merger.

The fees associated with a standard IPO are also extremely high. The company must pay for underwriting fees, legal fees, accounting fees, printing costs, and filing fees. With a public shell merger, the costs are much less to go public.