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Re: mick post# 1528

Sunday, 08/12/2007 6:51:01 PM

Sunday, August 12, 2007 6:51:01 PM

Post# of 3284
http://www.pinksheetsotc.com/grey_sheet_shells.htm



Grey Sheet Shell Companies
A Grey Sheet Shell Company is a Pink Sheet that has not filed a 15c2-11. Due to this fact, all orders to purchase the accompanying stock must be unsolicited and the issue is “non-piggyback” qualified for market makers. This means that each market maker is responsible for conducting their own due diligence and cannot rely upon the due diligence of another market maker who has previously quoted a bid or ask price for the stock.

A Grey Sheet is a non-reporting entity and is sought out by companies who are interested in going public in the sense that they have a symbol, transfer agent and shareholder base, but do not have the immediate need for high liquidity and high trading volume of their stock. It is a sound vehicle for companies in need of capital in the amount of $1 million or less and can be ideal for conducting Rule 504 registered public offerings; Rule 504 accredited investor offerings and similar exempt intra-state offerings.

Grey Sheet Shells and their relevant offerings are generally for young or start-up companies that do not want to actively trade their stock and attract attention from the street until they have completed acquisitions; generated increased revenues or completed other short-term (less than five years) plans, but still desire the benefits of being a publicly traded company. These companies have the ability to: attract investors who want to know that there is an exit strategy in place for the near future; increase acquisition strength; attract venture capitalists; and enjoy the general status benefits of being a public entity.

Grey Sheets are also used by companies that already have a small number of shareholders to help them establish a larger shareholder base by conducting a 504 offering as discussed above. Typically, the NASD considers a shareholder base as a factor in approving 15c2-11 applications for market maker quotations on either the pink sheets or bulletin board. Consequently, and importantly, Grey Sheet Shells can assist companies establish a trading history ­ through the 504 offering and with sophisticated investors, without the added expense of being a reported entity.

Since Grey Sheets do not qualify for short sales, the fear of short selling by the street is also eliminated. Also, because market makers may only quote unsolicited bids and asks and cannot “make a market” in a grey sheet stock, there is no concern of a market maker short selling the Grey Sheet stock either.

Grey Sheets can evolve into Pink Sheet Shells or Bulletin Board Shells by filing a Form 10 or similar registrations statement as well as a 15c2-11 application to be quoted on the bulletin board, and may even bypass the application to be quoted on the pink sheets.

Grey Sheets can range in price from $50,000 to $90,000.

This site is intended as a public resource for those gathering information and conducting due diligence for reverse mergers and public shells. It is not a solicitation to buy or sell securities and should not be construed as legal advice or considered to be a replacement for retaining securities legal counsel. For more resources, use our search box below.

Call us now, 800-971-7935 | Email: EMergersInc@aol.com




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