Quote NO LOL, "No it isn't. Not if they simply go public as an SEC registrant on the OTC. The chief expenses of that are preparing a Form 10 or S-1, and the cost of the audit.
If you buy a dark shell with the intention of becoming an SEC registrant, you're ADDING the cost of the shell to the costs of the initial registration statement and the audit.
"
Uh....NO..Not correct at all.
An IPO, traditional sense, runs $MILLIONS of dollars- underwriter fees to sell it, a "road show" to promote it, 6 months "on the road" etc. It EASILY runs $3 to $5 MILLION to "go public" via a traditional IPO, larger ones, even more than that.
Using a shell- these guys can probably do this for $200K at the most, and I'd guess a whole lot less than that.
1) Look at the shell- they probably got it for a song, it was a busted-out company, with one dude left, less than 30 shareholders, no filings for 1.5 years, etc. What, probably $50K to buy the shell, at most.
2) An audit? The company had almost no assets, no cash, no anything. A high school accounting class can audit this nothing-burger and produce the needed financials- on a short weekend. What the H is there to "audit"??? The financials are listed in "thousands" of dollars- it's less than my local pizza joint dude has in running his biz, and he has the local community CPA "doing his books" and could probably use H&R block if in a pinch, LOL !! This is a Quickbooks level audit- that's how small this shell was. It really had no business even being public traded in the first place, which is likely why the dude "went dark", as he was down to his last dime, or dollar at best.
ANY competent securities law firm will either have an in-house auditor, or refer um to their co-partner audit firm, and they can audit this thing in short order. The audit will be as costly as auditing any of the 100's of small businesses I can drive by in any local "tilt up" industrial park within 20 miles of here. It's nothing. They have/had no plant or equipment, no inventory, almost no cash, no assets, they haven't had employees for a year or more, nothing. They have no debts, no toxic notes, no past due obligations, etc The last 10-K is a Reader's Digest easy version, like a short form 1040 by Turbotax, it's so basic.
3) It makes no difference that the shell was "dark" as the shares still trade- as if you might of missed it the last couple of days, they've traded $millions of dollars worth. It's not a halted or SEC sanctioned company- the poor guy before, he merely filed to "go dark" to halt the cost of SEC filings, audits etc, because as I just explained, it's not worth paying a audit firm even $5 grand, when you've got about $20K left in your "company" bank account, no more employees, the biz has been wound down, and you're probably not even taking a salary anymore. It's a shell, like any other shell- and it's clean from all appearances. No lawsuits, no SEC issues, no complex prior accounting problems ever SEC filed, not in a biz that would have legal or environmental liabilities like mining or medical, etc It's just a good ole shell, with shares that still trade- it's ripe for a merger, and some simple filings.
This will cost a tiny fraction of an IPO, get um on a U.S. market- they start filing SEC docs and get current, and if they got their ducks in a row, they could probably try and up-list in approx 1 yr, after they lose the "shell" baggage label.
You can't just "go public on the OTC or any exchange as a SEC registrant", whatever that means??? You have to have shares in place- that's what the shell does. It's trading, again, in case you missed it. They don't need to do anything- the O/S share count is fine, they can capitalize it however they want such as direct merger of private company assets into the public shell, w/o any share sale needed, etc
It's magnitudes cheaper and faster than an IPO. Again, this is the "poor man's" way to go public - and company's are doing it more and more as it's fast, it's much cheaper, and it gets um "on the exchange", where they can then spend a year to "get seasoned" and go for an uplist. That year- that's more like a typical IPO, and they'll be done in a month or two at the most- sometimes weeks at the most, and save about $3 million minimum in the process.
Google some SEC law firm blogs- they explain it in great detail. SHELL MERGER or any variation on those terms- they'll have side-by-side charts of "IPO vs SHELL" and the cost differences, etc. It's big, a huge difference. This ain't Google or Apple trying to go public here, with Morgan Stanley or CITI as their underwriters- getting at least $5 mil a piece for "doing the deal". It's a foreign firm that wants to move a foot-print into the U.S. markets, and then test the waters- and go from there. They can do it for pocket change relative to an IPO. It's smart.
News 
Market Data 
Discover 
