Public shell companies are almost always companies that failed. People skilled in SEC corporate compliance and business reorganizations purchase the controlling stock in defunct public companies. They hire lawyers to settle creditor claims and bring the SEC filings up to date. They hire accountants to complete due diligence and produce the required audits. If the public company is non-reporting, they complete the Form 10 registration. Upon completion of the reorganization of the company and bringing it into compliance with state and federal regulators the company is made available for a reverse merger.

A second source of shell companies are public companies developed specifically as a vehicle to be used to accomplish a reverse merger. These companies are commonly referred to as "blank check companies" because their sole purpose is to be a merger vehicle. The SEC specifically allows these types of companies. The Securities Act of 1933, under Rule 419 provides for "a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies"…… Shells developed for reverse mergers are registered and reviewed by the SEC prior to their being made available as reverse merger vehicles. One advantage of this type of company is that they are virtually without risk of undisclosed liabilities.

We buy and reorganizes defunct public companies and develops new shell companies.