CASE STUDY
DELAYED STOCK OFFERING MADE SENSE


Situation
    A pre-revenue company with a patented product line had
    great growth potential. In order to meet that potential, the
    company needed a large infusion of cash.

Problem

    The company decided that the best way to acquire cash
    for growth was to move their company into a shell
    corporation in order to sell additional stock.

Solution

    Shells can be tricky if the management team is not
    properly prepared for the expenses and hassles (like greatly
    increased financial reporting requirements) related to
    them. We advised the client to seek proper legal counsel
    before embarking on the purchase of the shell corporation.

    While this resulted in the delay of the growth of the
    company for a short time (they decided not to acquire the
    shell after they received additional advice from proper
    legal counsel), ultimately the company was able to attract
    venture funding at a level that exceeded the supposed
    benefits of moving into a shell.

Benefit

    The company continued to grow with fewer controls and
    expenses.
JACK MIXNER
STRATEGY