Below is a basic list of information that you should initially request when starting the due diligence process of acquiring a shell corporation:

Exchange    -    Trading Symbol    -    Piggyback Registered    -    Reporting Company    -    Freely Trading Stock    -    Share / Capital Structure    -    State of Incorporation    -     Shareholder Count    -    Balance Sheet Information    -    History of Shell and Companies Involved

Each shell has a slightly different offering, which may or may not make sense for a each company’s particular situation. Outlined below is a number of different shell alternatives and some basic information about each particular structure:

Non-Trading Non-Reporting (Gray Sheet)

Reporting Non-Trading (Gray Sheet)

Trading Non-Reporting (Pink Sheets)

Trading and Reporting (OTC/BB)

Positives: These types of shells are very inexpensive
Negatives: No trading market, No symbol, Typically a registered company
Shareholder base: Typically anywhere from forty to sixty shareholders
Trading: No
Costs: Typically less than $50,000 in cash and less than 1.0% equity

This type of Company does not typically have a trading symbol. In order to become a registered public company you must file with SEC a full business information statement (Form 10) and audits to become a fully reporting 34 act company. Upon approval of the Form 10, the Company must file a registration statement to create freely trading shares or hold the shares until they are 144a eligible (if you complete a financing the investor is typically going to request and registration statement be filed within 45 days of the financing completion date).
Upon approval of the registration statement or simultaneous with the filing of the registration statement the Company must have a Market Maker file a 15c211 with the NASD to get trading symbol. This type of shell is least attractive

Positives: Typically very inexpensive, Fully reporting giving investors access to public information
Negatives: No trading market, No symbol
Shareholder base: Typically anywhere from forty to sixty shareholders
Trading: No
Costs: Typically less than $100,000 in cash and less than 1.0% equity

This type of Company does not typically have a trading symbol. This type of Company is a registered Company due to a Form 10 effectiveness.  To gain excess to freely trading shares the Company must file a registration statement or hold the shares until they are 144a eligible (if you complete a financing the investor is typically going to request and registration statement be filed within 45 days of the financing completion date). Upon approval of the registration statement, or simultaneous with the filing of the registration statement, the Company must have a Market Maker file a 15c211 with the NASD to get trading symbol.  This type of shell is attractive due to its fully reporting status and due to low cost. This structure is a good alternative so long as the Company is not in an urgent rush to raise additional capital within six to nine months of closing the reverse merger.

Positives: There is a current trading market
Negatives: Typically no relevant or up to-date public information forcing investors to fly blind
Shareholder base: Typically greater than forty shareholders
Trading: Yes
Costs: Typically anywhere from $150,000 to $500,000 in cash and 0.5% to 5.0% equity

Company is trading on the pink sheets due to either becoming delinquent on its reporting requirements or lack registering with the NASD. If the Company has never registered with the NASD, then they must file a Form 10 to become a fully registered Company.  To gain excess to freely trading shares the Company must file a registration statement or hold the shares until they are 144a eligible (if you complete a financing the investor is typically going to request and registration statement be filed within 45 days of the financing completion date). Upon approval of the registration statement, or simultaneous with the filing of the registration statement, the Company must have a Market Maker file a 15c211 with the NASD to move to a higher exchange or if a delinquent filer then the Company must get current with its financial reporting and apply to re-list with the NASD.  This type of shell is relatively attractive due to its current trading status and due to its relatively low cost. This structure is a good alternative so long as the Company does everything in its power to move to a higher exchange.  Often the credibility of Pink Sheet Companies are less then other public companies due to past issues and concerns with Companies on the Pink Sheets and the lack of public information that is available.

Positives: There is a current trading market
Negatives: Often very expensive in terms of both cash and equity
Shareholder base: Typically greater than two hundred shareholders
Trading: Yes
Costs: Typically anywhere from $350,000 to $1,000,000 in cash and 1.0% to 10.0% equity

Company is typically trading on the bulletin board exchange and is fully reporting with the SEC, (Company must file annual 10Ks with an audit, 10Qs and 8Ks. Can be a 15D reporting under the '33 Act, or a 12G reporting under the '34 Act.). If you can find an affordable fully reporting and trading shell then this is usually the best option for a Company exploring a reverse merger.  Often the Company should be very careful when negotiating pricing of the shell and make sure to get a fair and reasonable deal.  These types of shells also typically have the greatest amount of liquidity in the stock and offer the Company the best scenario for raising capital.