As the summer deadline nears, a number of inactive OTC companies are pushing to get their filings in order to comply with the new OTC rules governing the reporting status of issuing companies. This has prompted a number of shell companies to push for new controlling directors in order to restore their reporting status with OTC markets. The newest addition to this process is Aerius International Inc (AERS) which can serve as a case study for other companies wishing to use a dormant shell company as a new home for their private company wishing to go public.
Company: Aerius International Inc (OTC:AERS)
This is a unique example due to the nature of its current status as a shell company. In general, dormant issuing companies within OTC markets are usually filled with debt left over from the previous management. When a new group of directors taking it over, whether it be from custodianship change or buyout, they are usually tasked with a monumental task of “cleaning the shell”.
However, with AERS, the shell it self is clean and lean. Meaning, before the previous management left, they left the number of authorizes shares alone, which in this case, is extremely small. So as its stands right now, AERS has a very small number of out standing shares with a very small public float.
Additionally, the company has zero convertible notes and debt, a rare thing among similar companies in this domain. The following table, which is from the companies most recent quarterly filing with the SEC, shows zero convertible debt.
Thanks to OTCmethod.com we are able to see the most recent change of controlling ownership, which shows a new director. In most cases this typically means that the new controlling director is individual responsible for the new private entity that plans to reverse merge into the issuing company.