SHELLMKT

Empty companies that still trade. Who grabs them, and what is inside.

A public shell keeps its ticker and its stockholders with little or no business behind it. Shells are a known tool for hiding who is in control and for laundering money. We read the SEC filings to show which ones are empty, who takes control, and what is loaded inside.

What is a shell company?

A public company with no real business: no or nominal operations, and little or nothing in assets beyond cash. It still has a ticker, stockholders and a seat on the market, which is what makes it valuable to whoever takes control. That is the SEC’s own test (17 CFR 240.12b-2), and every annual report must say yes or no.

The shell listEvery company that checks the “shell company” box on its annual report.Being built Who grabs themChanges in control, new big holders, the same names at other shells.Being built The people in shellsOfficers, directors, big holders and signers, and every other shell they appear in.Being built What is insidePoison pills, preferred stock the board can issue without a vote, warrants.Being built Check a company nowWarrant Wire reads any ticker’s filings today.

What counts as a shell

Under SEC rules (17 CFR 240.12b-2), a shell company is a registrant with no or nominal operations, and either no or nominal assets, assets of only cash and cash equivalents, or cash plus nominal other assets. Every annual report on Form 10-K asks the company to check yes or no.

How a takeover shows up in the filings

Form 8-K, Item 5.01
Changes in control of the registrant.
Schedule 13D
A new holder of more than 5% says who they are and what they intend.
Form 8-K, Item 5.06
Change in shell company status: the business that moved in, with the information a Form 10 would require.

The people in shells

Shells change hands, but the same people often turn up again. We list every officer, director, large holder and signer named in each shell’s filings, and every other shell where the same name appears, quoted from the filings with the SEC number. A name on this list says nothing about wrongdoing.

The words the deal makers use

Shells are bought and sold in their own language. Here is what the terms mean.

Pubco
Trade slang for a public company, usually one being offered as a shell.
Clean shell
A shell sold as current in its SEC filings, with no debts or lawsuits attached. “Clean” is the seller’s word, not a finding.
Trading shell / non-trading shell
Whether the shell’s stock has a ticker and is quoted (trading) or not (non-trading). A trading shell sells for more.
Control block
The majority stake sold with a shell, giving the buyer the board.
Reverse merger / reverse takeover (RTO) / back-door listing
A private company merges into a public shell, and its owners end up in control: going public without an IPO.
Alternative public offering (APO)
A reverse merger with money raised at the same time, usually a PIPE (private investment in public equity), often with warrants.
Super 8-K
The Form 8-K filed when a shell stops being a shell, carrying the information a Form 10 would require (Item 5.06).
Form 10 shell
A company that registers with the SEC on Form 10 with no business, ready to be used as a shell.
Custodianship shell
A dormant company revived when a court appoints a custodian, often under Nevada law (NRS 78.347), who can then sell control.
Blank check company / Rule 419
A company with no business plan except to merge with an unnamed company; SEC Rule 419 restricts its penny-stock offerings.
SPAC / de-SPAC
A blank-check company listed on an exchange that holds its IPO money in trust to buy a private company; the merger is the “de-SPAC.”
Shelf company
An aged company with no activity, kept “on the shelf” and sold to a buyer who wants a company with history.
Rule 144(i)
Shares of a shell company cannot be resold under Rule 144 until a year after the company files its Form 10 information.
15c2-11 / Form 211
The rule and form a broker-dealer uses before quoting an over-the-counter stock: how a shell gets a quote.

What can be loaded inside

A poison pill (shareholder rights plan)
Reported on Form 8-K under Item 3.03, with the rights agreement as an exhibit.
Blank-check preferred stock
Preferred stock the board may issue, with terms it sets, without a stockholder vote, if the charter allows.
Warrants and new shares
Rights to buy shares later, often at prices set in the deal. See Warrant Wire for any company.