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Reporting non-trading shell:
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A prospective target company should be aware that the market price and volume of its securities, when and if listed for secondary trading, may depend in great measure upon the willingness and efforts of successor management to encourage interest in the Public Shell within the United States financial community. The Public Shell does not have the market support of an underwriter that would normally follow a public offering of its securities. Initial market makers are likely to simply post bid and asked prices and are unlikely to take positions in the Public Shell's securities for their own account or customers without active encouragement and a basis for doing so. In addition, certain market makers may take short positions in the Public Shell's securities, which may result in a significant pressure on their market price. The Public Shell may consider the ability and commitment of a target company to actively encourage interest in its securities following a business combination in deciding whether to enter into a transaction with such company. A business combination with the Public Shell separates the process of becoming a public company from the raising of investment capital. As a result, a business combination with the Public Shell normally will not be a beneficial transaction for a target company whose primary reason for becoming a public company is the immediate infusion of capital. The Public Shell may require assurances from the target company that it has or that it has a reasonable belief that it will have sufficient sources of capital to continue operations following the business combination. However, it is possible that a target company may give such assurances in error, or that the basis for such belief may change as a result of circumstances beyond the control of the target company. Prior to completion of a business combination, the Public Shell will generally require that it be provided with written materials regarding the target company containing such items as a description of products, services and company history; management resumes; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, or service marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such company and its affiliates during relevant periods; a description of present and required facilities; an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements; audited financial statements, or if they are not available, unaudited financial statements, together with reasonable assurances that audited financial statements would be able to be produced within a reasonable period of time not to exceed 75 days following completion of a business combination; and other information deemed relevant.
All rights reserved.
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