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We were Tech Laboratories, Inc. before RNWF
http://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0000096664
Renewal Fuels, Inc. (0000096664)
SIC: 6770 - Blank Checks
State location: WI | State of Inc.: DE | Fiscal Year End: 1231
formerly: TECH LABORATORIES INC (until 2007-09-17)
Business Address
1818 N. FARWELL AVE.
MILWAUKEE, WI 53202
(414) 283-2625
Mailing Address
1818 N. FARWELL AVE.
MILWAUKEE, WI 53202
Ownership Reports from: (Click on owner name to see other issuer holdings for the owner, or CIK for owner filings.)
Owner Filings Transaction Date Type of Owner
KING JOHN W 0001398609 2007-06-21 officer: CEO and CFO
MARKS DAVID M 0001196126 2007-06-21 director
Crivello Frank P 0001288865 2007-06-21 10 percent owner
FORST BARRY IAN 0001399066 2007-05-30 10 percent owner
MCNEILL MARTIN 0001399063 2007-04-30 10 percent owner
PRESS CRAIG 0001300183 2006-10-31 director
Silverman Donna 0001349085 2005-12-19 director, officer: President, CEO and CFO
STERNBERG JEFFREY 0001299952 2005-03-25 director
KANAKIS GEORGE D 0001282805 2005-03-25 director
BJORNDAL EARL 0001106987 2004-02-25 director, 10 percent owner
CIONGOLI BERNARD M 0001106986 2004-02-20 director, 10 percent owner, officer: President, CEO, FO
That is very peculiar trading, you are right ...
All the buys were made to push the price up to .06 so somebody could dump a huge block at .05. Could be a trader with a huge position backing out of that position.
95,555 buys
7,178,940 sells ...
Renewal Fuels, Inc (414) 283-2625
1818 N. FARWELL AVE.
MILWAUKEE, WI 53202
Renewal Fuels, Inc. CIK#: 0000096664 (see all company filings)
SIC: 6770 - BLANK CHECKS
State location: WI | State of Inc.: DE | Fiscal Year End: 1231
formerly: TECH LABORATORIES INC (filings through 2007-09-17)
(Assistant Director Office No 9)
Get insider transactions for this issuer.
I just called the Renewal Fuels corporate offices and there was no mention of a David Marx, just a plain jane "This is Renewal Fuels, Inc., there is nobody here to take your call ... leave your message at the tone"
I gave them my name and identified myself as a shareholder and asked them to contact me via e-mail regarding the recent company activity.
We'll see if they contact me and what they come up with ...
IMHO one of these next few weeks the agreement will be filed after hours and RNWF will be no more ... trading will be halted and hopefully we collect our .12 per share.
git 'er done !!! HO, HO, HO !!!
Red
DD regarding the company's State registrations
Delaware
RNWF - https://delecorp.delaware.gov/tin/controller
CPV Holdings - https://delecorp.delaware.gov/tin/controller
Maryland
CPV Holdings - http://sdatcert3.resiusa.org/UCC-Charter/DisplayEntity_b.aspx?EntityID=Z06064448&EntityName=COMPETITIVE+POWER+VENTURES+HOLDINGS%2c+LLC+++++++++++++++++++&TabNum=2
RNWF - Not applicable
YCKM - China time 13 hours ahead ...
It's Thursday 12:30 am .... 11:30 am Wednesday est
http://www.timeanddate.com/worldclock/
In all fairness to the parties we need to let this run it's course, no matter how painful it is to us, and then work a back-up plan.
IT makes no sense to me that we cannot contact the company therefore I think the doc is real, the deal is done, and we are waiting on a filing.
But time will tell, there is an enormous amount of paperwork that needs to be completed so I think they gave themselves three extra weeks before the end of the year to get this done. imho.
Right or wrong it won't be the end of the road for this 'blank check' company.
Best to all ... Red
I guess my Lawyer will figure that out ...
This is an odd situation.
I think that the CEO of CPV ... MR. Douglas F. Egan will eventually say yes we are buying the company or hide beind his counsel.
http://www.cpv.com/Doug.php
http://www.cpv.com/rburke.php
All the best,
Red
do not buy above .001 until we gather the the team.
Just a thought ...
What if the shareholders take the company PRIVATE. Confidential agreements and financial backing.
I have been shopping the RNWF "Blank Check" also known as a shell company. Look at the SEC website for balnk check. This company is clean.
If CPV doesn't file the "fake" agreement then I have a few China biofuels companies that want to come to the US market in this green economy.
I'll give CPV until 12/31/2010.
Does anybody know the VALUE of a credit? Huge.
Non-food fuel plant biomass feedstock? Huge.
Let's be proactive ... instead of RE-active.
All the best,
Red
New investor here in for 50,000 shrs....
Let's git 'er done !!! Bring on the PRs !!!
YIKES ... shorts covering easy and the longs running for dem dar hills !!! LOL
Buys 1,100,000
Sells 8,500,474
Nows the time to file and git 'er done !!!
"... the engineers at Los Alamos agreed to meet with Lathrop Engineering to fabricate a production model and miniaturization unit of the IOBS. With the assistance of LANL the Company also made arrangements to collaborate with other leaders in the field to conduct validation studies on the IOBS device and TB assay upon finalization, and assist with developing the HIV assay, and assist with clinical trials and approvals."
http://www.lathropengineering.com/
Would really like a synopsis of where we stand regarding:
1.) Where are we with regards to the RM and spin-off of Zhuhai Oil Energy Sciences and Technology, located in Guangdong Province, China.
2.) Where are we with regards to acquiring 'Letters of Credit' for Lanzhou Sunshine New Technology Development Ltd. from Chinese Banks?
3.) Where are we with regards to a Gates Foundation grant?
I didn't realy think about the possibility of a buy-out from a major medical equipment manufacturing company but what is a reasonable take out offer for the company?
65 million OS outstanding what is the market for the IOBS unit worth? $1, 3, 5, 10 per share? Stock swap with a major? Just a thought ...
All the best,
Red
CNBC reports renewable energy tax credits have been attached to the new tax bill to encourage house democrats to vote for the bill.
Maybe CPV brass have been waiting to make sure this provision was added into the legislation before filing "the plan"?
OK gentlemen, git 'er done !!!
All the best,
Red
Back to the "penalty box" ...... :~(
I agree ... no mention of the Gates Foundation interaction or any other substantive information.
News = Consensus for Biomagnetics’ Integrated Optical Biosensor Continues to Build Among Leaders at Global Tuberculosis Surveillance conference
Today : Monday 13 December 2010
Biomagnetics Diagnostics Corp., (PINK SHEETS:BMGP - News) a developer of revolutionary diagnostic systems and technology for HIV, hepatitis, tuberculosis, Cholera and malaria detection, and other innovative technologies, today announced CEO Clayton Hardman attended a series of meetings on the important topic of diagnosing and managing tuberculosis (“TB”) with industry leaders from the Centers for Disease Control, the Foundation for New Innovative Diagnostics (“FIND”), the World Health Organization and the University of KwaZulu-Natal, South Africa and others, at a Symposium hosted by Los Alamos National Laboratory.
While at the Global Tuberculosis Surveillance Workshop held this month in Santa Fe, New Mexico, Biomagnetics Diagnostics Corp. met with the engineering team from Los Alamos that built the bench-top prototype unit of its Integrated Optical Biosensor (“IOBS”) for the detection of TB. As a result of these meetings, development of the “IOBS” moved forward as the engineers at Los Alamos agreed to meet with Lathrop Engineering to fabricate a production model and miniaturization unit of the IOBS. With the assistance of LANL the Company also made arrangements to collaborate with other leaders in the field to conduct validation studies on the IOBS device and TB assay upon finalization, and assist with developing the HIV assay, and assist with clinical trials and approvals.
Additionally, Mr. Hardman is planning to attend further meetings where he expects to gain insights into the current status of tuberculosis related activities, interests and goals at the Center for Disease Control (“CDC”), one of the premier U.S. organizations for the study and containment of prevalent global diseases.
Clayton Hardman, CEO of Biomagnetics Diagnostics Corp. commented, “Attending the Global Tuberculosis Surveillance Workshop sponsored by LANL has been a valuable experience. We are glad to have been a part of this symposium and look forward to working with the alliances to bring the IOBS unit to market.”
About Biomagnetics Diagnostics Corp.
Biomagnetics Diagnostics Corporation is an advanced medical device and biotechnology company and an acquirer of other innovative technologies. The Company is currently developing a waveguide-based advanced integrated optical biosensor through its cooperative research and development agreement with Los Alamos National Security, LLC, which will initially be used for cholera, tuberculosis, HIV and malaria diagnosis. More information on Biomagnetics Diagnostics Corp. can be seen at www.biomagneticsbmgp.com.
A little DD ... I hope they git 'er done this week 12/17 as people will begin to take their holiday vacations the week of December 20-23 and many senior staff and decision makers leave until after the New Year.
Only 13 more business days until the end of the year !!!
I found this interesting about CPV ... they registered 100 million new LLC units and sold them to Board members, Warburg Pincus Funds and senior staff on November 11, 2008. Maybe they use these "units" in combination with RNWF shares for the IPO?
http://www.sec.gov/Archives/edgar/vprr/08/9999999997-08-046724
Douglas F. Egan, Gary A. Lambert and John Foster are LLC unit holders. http://www.cpv.com/management_team.php
http://www.cpv.com/investment_partners.php
Warburg Pincus employees acting as Directors also hold LLC Units:
http://www.warburgpincus.com/PDF/release_20060912.pdf#xml=http://www.warburgpincus.com/search/PdfHighlighter.aspx?DocId=430&Index=E%3a%5cwebsites%5cWarburg%5cDTSearch%5cWarburg&HitCount=3&hits=2d4+2e0+2e1+
Jeffrey Harris
In Seon Hwang
Jacek Makowski - Former client of WP AND many CPV employees
Two funds:
Warburg Pincus Equity PArtners LP
Warburg Pincus Private Equity IX LP
CPV filing
ACCESSION NUMBER: 9999999997-08-046724
CONFORMED SUBMISSION TYPE: REGDEX
PUBLIC DOCUMENT COUNT: 1
ITEM INFORMATION: Rule 506
FILED AS OF DATE: 20081120
DATE AS OF CHANGE: 20081202
EFFECTIVENESS DATE: 20081120
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: Competitive Power Ventures Holdings LLC
CENTRAL INDEX KEY: 0001451069
IRS NUMBER: 000000000
FILING VALUES:
FORM TYPE: REGDEX
SEC ACT: 1934 Act
SEC FILE NUMBER: 021-124670
FILM NUMBER: 08067070
BUSINESS ADDRESS:
STREET 1: Silver Spring Metro Plaza II
STREET 2: 8403 Colesville Rd Suite 915
CITY: Silver Springs
STATE: MD
ZIP: 20910
BUSINESS PHONE: 240-723-2300
MAIL ADDRESS:
STREET 1: Silver Spring Metro Plaza II
STREET 2: 8403 Colesville Rd Suite 915
CITY: Silver Springs
STATE: MD
ZIP: 20910
All this is predicated upon 1.)the validity and 2.) filing of the Reorganization and Merger Agreement signed 11/18/2010 between Doug Egan, CEO of CPV Holdings and Don Jackson, interim CFO, Renewal Fuels, Inc.
Best to all ...
Red
Now back to "time out".
I'm interviewing lawyers tomorrow to get to the bottom of this crap.
I'm tired, as a shareholder, of being told we don't comment on this or that. The Law firm refers shareholders to RNWF and CPV who will not "comment on rumors".
Screw them.
Just because RNWF isn't a reporting company ... what happens to the SHAREHOLDER's rights. This shell company stuff is all new to me, but if and when I want answers there HAS to be a corporate contact person right? Whether it is a court appointed Custodian, CPA, Lawyer, or Board designated representative.
I want to know what the heck is going on ...
These people need to deny that a deal is in the works or else we will find out why they don't want to " Just say NO".
I am a paying member of IHUB but get only one post a day on this stock board because I am banned because of 'Opy' better know as the wet blanket Ben100.
PM me if you want to know more details. I am not renewing any paid services on this IHUB board as of the end of the month.
All the best,
Red
I would really like to see an update on this situation because of the diesel fuel shortages in China. The timing is right for this deal ... fuel shortages and push for green technologies.
Biomagnetics Ends Acquisition Related Quiet Period - To Spin Off Chinese Bio-Fuels Operation Into Publicly Traded Company
November 8, 2010 - Biomagnetics Diagnostics Corp., (PINK SHEETS:BMGP - News) a developer of revolutionary diagnostic systems and technology for HIV, hepatitis, tuberculosis and malaria detection, and other innovative technologies, today announced its plans to spin off its Chinese bio-fuels operation, Zhuhai Oil Energy Sciences and Technology, located in Guangdong Province, China, into a separate publicly traded entity.
Over the past few months, the management team at Biomagnetics has been working on a structure that it believes will maximize shareholder value. The Company has been interviewing investment groups to facilitate this transaction. The new Company, which will trade on the OTCBB as a fully reporting organization with the SEC, will enter into a contract with Biomagnetics to purchase all intellectual property and contract rights to the proprietary low carbon fuel formulations.
“A green revolution is sweeping through China resulting in a critical demand for low carbon bio-fuels. These unique formulations greatly reduce particulate and carbon emissions while still being cost competitive,” commented Clayton Hardman, CEO of Biomagnetics. “We are negotiating specific terms while waiting for GAAP certified audits. Specific terms to finalize include capital compensation and percentage interest in the new company Biomagnetics will receive for selling its Bio-Fuel rights. This should add to shareholder value, and reduce or eliminate future shareholder dilution.”
All the best ... Red
This is an intersting BMGP post from the joe noel site. They have been hush-hush about the biofuels deal since they returned from China a week or so ago .... hmmmm
http://www.joenoelstocks.com/stocks-covered/biomagnetics-diagnostics-bmgp/update-on-biomagnetics-bmgp-the-gate-foundation-and-world-health-organization-come-knocking/
>>> Geoff December 6, 2010 at 11:09 am
On November 10, 2010 I received an email from Clayton and he stated that they hoped to gain enough money from the spin off of Bio Fuels to get us onto NASDAQ. If this is indeed his intention, then I’d say that Clayton has a plan that gets us to $ 4.00 pretty soon. Why would he suggest it as a goal if he didn’t understand what it takes to get there? <<<
Best to all ...
Red
I believe that they will delay the filings. Just as I mentioned before.
Sometimes there are miscommunications and things get posted when they are not supposed to be posted. Shit happens. People are spiteful, they seek money or revenge.
Believe me, as I see the whole picture it looks like this deal has been in the works since early 2008.
Disclosure, I own stock.
That said if these people including John Crivelli, RNWF reps, RNWF auditors CPV Reps, & their counsel Wachtell, Lipton, Rosen & Katz, and others have invested 2-3 years of time and money in this deal it's not going away because of a technicality. imo.
Business is business. This all makes sense, at least to me.
All the best ... Red
Now I expect to be attacked by bashers and lunatics ... we'll see.
With notoriety and confirmation of the revolutionary cutting edge IOBS product that should spur some investment in the company.
All investors will need to here is Bill Gates providing a grant or taking a position in the company and this stock will fly.
Future looking good right now. I hope they knock one out of the park ... fence sitters will have to make a decision to get in soon for maximum gains.
It shouldn't be long now until we get some pre-orders and possibly private investment in BMGP ... we are looking good ...
How do we know the "DOC" is fraudulent?
U got proof POSITIVE ?
I schnitzeled more shares today thanks to your post fidz, many thanks for being on top of things. Bill Gates and the WHO are huge supporters of 3rd world health issues and I wouldn't be surprised that we get 10's of millions to forward this technology and distribute it globally. imo
How many shares do I need for a 13D?
FWIW CPV filed a REG D 4(6) 506 11/20/2008
http://www.sec.gov/Archives/edgar/vprr/08/9999999997-08-046724
Beneficial owners include Warburg Pincus, CPV Board members and Executive staff; including Doug Egan.
http://www.hedgefund-index.com/d_regd.asp
All the best,
Red
I gleaned this paragraph from a legal website and it fits our situation to a 'T' ... I am just trying to draw some parallels between legal theory and our alleged contract. If this was a hoax it was a very elaborate scheme and the perpetrators would have had the gall to forge signatures and name the world's leading mergers and acquisitions firm as counsel. Thus I think we have a deal waiting to be filed.
All the best ... Red
>>> The Nature of a Public Shell Company
When a public company elects to become a shell, it files Form 15, which is a very brief notification to the SEC that the company is suspending its duty to file reports with the SEC. At this point, operational control of the entity is frequently placed with an attorney who specializes in shell companies. The attorney will generate the minimum number of required board meetings, authorize audits, and file tax returns for the shell – all this for a number of years, while the shell “lies fallow.” The attorney’s intent during this period is to wait for the statute of limitations to eliminate the risk that the shell can incur any liabilities, especially from lawsuits. Thus, the best shell companies have been sitting quietly for a number of years. The attorney may take additional steps to modify the shell’s articles of incorporation or bylaws, if those documents contain provisions that would be less likely to attract an eventual buyer for the shell. Also, if there are too many shares outstanding, the attorney can engineer a reverse split to shrink the number of shares.There may still be a tiny market for the company’s shares, which may continue to trade on the over-the-counter market. Shares will typically trade at a few pennies on the dollar. The only reason why there is any value to the shares at all is the market’s perceived estimate of the price at which the shell can eventually be sold to a buyer.
FWIW The fact of the matter is RNWF is a non-reporting company and does not have to PR or report anything. If the deal goes through CPV will have 48 hours to file an 8K.
They will not tell us if there was a minor delay in the filing date.
We may as well sit back and understand that we have no way to control what is or not going to happen.
Who says CPV and Wachtell, Lipton, Rosen, and Katz don't delay this? They hold all the cards. The deal is signed and executed. They can file it when they are darn ready too.
I am waiting for the pay-off because the whole progression of this deal from beginning to now makes perfectly good sense. I wasn't basing my investment decision on just one document.
The way I see the recent progression of this deal:
1.) March 27, 2009 RNWF files 15-12G to suspend SEC reporting function to become non-reporting shell. 128 shareholders of record.
2.) April 26, 2010 Mark Uram files SC 13D revealing he owns 36.1M shares or 93.1% of RNFW shares.
3.) May/June 2010 Private altenative energy companies E.ON and CPV held merger meetings/talks with RNWF.
4.) June 8, 2010 RNWF and CPV signed confidentiality agreements. CPV was selected as the suitor to work exclusively on a deal.
5.) June 8- November 18, 2010 CPV and RNWF counsel work together to craft the Merger Agreement. CPV retired RNWF debt and RNWF retired shares in order to make the deal viable.
6.) November 4, 2010, the RNWF Board duly called and held a meeting at which all of the directors of the Company were present, unanimously (i) determined that the Merger is fair to, and in the best interests of the holders of Company Shares, (ii) approved and declared advisable this Agreement and the Transactions.
7.) November 18, 2010 CPV and RNWF execute the contract to be filed on or before before December 5, 2010 giving all parties time to review and edit the document before filing the merger certificate.
1.3 Effect of the Merger
. At the Effective Time, Renewal Fuels shall be merged with and into the CPV in accordance with Maryland and Delaware Law, whereupon the separate existence of the Company shall cease, and CPV shall be the surviving corporation (the
“Surviving Corporation”). From and after the Effective
Time, the Surviving Corporation shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the CPV and Renewal Fuels, all as provided under Maryland Law.
3.2 Authority Related to this Agreement
. CPV has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions. The execution, delivery and performance of this Agreement by CPV and consummation of the Transactions have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of CPV are necessary to authorize this Agreement or to consummate the Transactions (other than, with respect to the Merger, the filing and recordation of the Certificate of Merger). This Agreement has been duly and validly executed and delivered [11] by CPV and, assuming due authorization, execution and delivery by Renewal Fuels, constitutes a legal, valid and binding obligation, enforceable in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, affecting creditors' rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought.
6.4 Interpretation of Agreement
. Each party and its counsel cooperated in drafting and preparing this Agreement. Any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the party that drafted it is of no application and is hereby waived.
Best to all ...
Red
Mark Uram background fyi ...
http://www.linkedin.com/pub/mark-uram/11/1/3ba
CPV picked the best counsel in the world to structure the RNWF deal. That makes me feel really good about the validity of the transaction.
The firm is known for its skill in mergers and acquisitions.
http://en.wikipedia.org/wiki/Wachtell,_Lipton,_Rosen_&_Katz
http://www.wlrk.com/Page.cfm/Thread/Practice/SubThread/Corporate
General Provisions 6.1 Notices
. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given and shall be deemed to have been duly given if delivered personally (notice deemed given upon receipt), telecopied (notice deemed given upon confirmation of receipt), sent by a nationally recognized overnight courier service such as Federal Express (notice deemed given upon receipt of proof of delivery) or mailed by registered or certified mail, return receipt requested (notice deemed given upon receipt) to the respective parties at the following addresses: If to CPV: Competitive Power Ventures 8403 Colesville Road Suite 915 Silver Spring, MD 20910 Attn: Senior Vice President, Finance with a further required copy to (which copy shall not constitute notice) Wachtell, Lipton, Rosen, and Katz 51 West 52ndStreet New York, NY 10019 If to Renewal Fuels: Renewal Fuels, Inc. 1818 North Farwell Avenue Milwaukee, WI 53202 Attn: Donald Jackson, Interim CFO.
Did anybody talk to Mark Uram?
What did he say about the document? CPV would have had to approach him about the deal as he was THE major shareholder of record only two months before CPV and RNWF signed the confidentiality statements to craft the deal.
All the best,
Red
But if your name and signature were on a "phoney" document you probably would want to make sure that you have it investigated and then totally deny it's validity or that you signed it ....
Initial SEC Filings
>> Once the acquiring company has bought the shell, the existing directors and CEO of the shell company will resign in favor of the new management team, and the shell will issue shares to the shareholders of the acquiring company in exchange for their old shares. The newly operational company will then file a Form 8-K with the SEC to document these events, and then proceeds to issue all standard SEC reports from that point onward. <<
Facts, just the facts .....
OK cue the Jeopardy theme song ... and we wait !
Have a great weekend everyone,
Red
Nochance it is a good thing that this company has been sitting around for several years .... read below ...
It took them several years to clean up the company and reduce the OS to 64+ million to ready RNWF for sale. This all fits into the puzzle.
>>> When a public company elects to become a shell, it files Form 15, which is a very brief notification to the SEC that the company is suspending its duty to file reports with the SEC. At this point, operational control of the entity is frequently placed with an attorney who specializes in shell companies. The attorney will generate the minimum number of required board meetings, authorize audits, and file tax returns for the shell – all this for a number of years, while the shell “lies fallow.” The attorney’s intent during this period is to wait for the statute of limitations to eliminate the risk that the shell can incur any liabilities, especially from lawsuits. Thus, the best shell companies have been sitting quietly for a number of years. The attorney may take additional steps to modify the shell’s articles of incorporation or bylaws, if those documents contain provisions that would be less likely to attract an eventual buyer for the shell. Also, if there are too many shares outstanding, the attorney can engineer a reverse split to shrink the number of shares.There may still be a tiny market for the company’s shares, which may continue to trade on the over-the-counter market. Shares will typically trade at a few pennies on the dollar. The only reason why there is any value to the shares at all is the market’s perceived estimate of the price at which the shell can eventually be sold to a buyer.
Holding for better news ...
Best to all ...
Red
The Nature of a Public Shell Company
When a public company elects to become a shell, it files Form 15, which is a very brief notification to the SEC that the company is suspending its duty to file reports with the SEC. At this point, operational control of the entity is frequently placed with an attorney who specializes in shell companies. The attorney will generate the minimum number of required board meetings, authorize audits, and file tax returns for the shell – all this for a number of years, while the shell “lies fallow.” The attorney’s intent during this period is to wait for the statute of limitations to eliminate the risk that the shell can incur any liabilities, especially from lawsuits. Thus, the best shell companies have been sitting quietly for a number of years. The attorney may take additional steps to modify the shell’s articles of incorporation or bylaws, if those documents contain provisions that would be less likely to attract an eventual buyer for the shell. Also, if there are too many shares outstanding, the attorney can engineer a reverse split to shrink the number of shares.There may still be a tiny market for the company’s shares, which may continue to trade on the over-the-counter market. Shares will typically trade at a few pennies on the dollar. The only reason why there is any value to the shares at all is the market’s perceived estimate of the price at which the shell can eventually be sold to a buyer.
Initial SEC Filings
Once the acquiring company has bought the shell, the existing directors and CEO of the shell company will resign in favor of the new management team, and the shell will issue shares to the shareholders of the acquiring company in exchange for their old shares. The newly operational company will then file a Form 8-K with the SEC to document these events, and then proceeds to issue all standard SEC reports from that point onward. The initial Form 8-K will be a lengthy one, itemizing the acquisition agreement and following up with many of the same disclosures found in a Form 10-K, but now describing the operations of the buying company, rather than those of the shell. Also, the Form 8-K must include the separate audited and combined pro forma financial statements for both the shell and the buying company for the past two years, which requires some coordination between the auditors of both entities. The effort required to complete this initial Form 8-K is so significant that the buying company should begin its preparation of the Form 8K at least one month before the scheduled acquisition date, since the form must be filed within four business days following the acquisition event.
Stock Trading in a Public Shell
At this point, the only stock that can be traded is the stock of the shell company that was tradable prior to the acquisition transaction. If the new management team wants to have other shares trade, then it can either advise shareholders to wait for Rule 144 to take effect in either six or twelve months, or it can engage in the sometimes lengthy and always expensive stock registration process.
Reasons to Buy a Public Shell
There are several reasons why a company will buy a shell in order to go public. These reasons are most appealing to smaller firms with weaker balance sheets, and quite possibly with operational histories that would not allow them to bear up well under the public scrutiny of a traditional IPO. The reasons are:
1.Cost. Buying a shell can be quite inexpensive in comparison to the cost of an IPO, and is one of the main reasons why companies buy shells. If an entity simply does not have the cash to pay for an IPO, the initial cost of a shell can be quite attractive. Some shell sellers will even accept shares rather than cash in payment for their shell, thereby reducing the buyer’s out-of-pocket cost even further.
2.Timing. Buying a shell can be completed in a few weeks and requires minimal regulatory approval, whereas an IPO can drag on for many months, and involves the detailed review of filing documents by the SEC. For a company in a hurry to go public, buying a shell can be an excellent choice.
3.Acquisitions. The stock of a public company is considered to be more liquid than that of a private firm, which makes it a more viable currency for engaging in acquisitions. Thus, a company interested in multiple acquisitions may acquire a shell for this sole purpose.
4.IPO ineligibility. Many companies have such weak operating results, structural anomalies, or high risk levels that they cannot reasonably expect to have a traditional IPO succeed – the institutional investors that traditionally buy large blocks of stock through IPOs will have no interest in investing. For these companies, a shell acquisition is the only remaining path to going public.
5.Net operating loss carryforwards (NOLs). A shell may have built up a significant amount of NOLs that the buyer can use to offset its future taxable gains. However, upon a change of control such as the sale of the shell to the buyer, the amount of NOLs that can be used in each subsequent year is severely restricted; it is limited each year to a small percentage of the market value of the shell. Since a shell have a small market value (as evidenced by the purchase price paid for it by the buyer), the NOL available each year will be minimal.
Reverse Merger Overview
A "reverse merger" is a method by which a Private Company or an unincorporated business goes public. In a reverse merger, a Private Company merges with an existing Public Company with no assets or liabilities. By merging into such an entity, a Private Company becomes public.
The Private Company merges into a Public Company and obtains the majority of its stock. The Private Company normally will change the name of the Public Company (often to its own name) and will appoint and elect its management and Board of Directors.
The advantages of public trading status, which are outlined in greater detail below, include the possibility of commanding a higher price for a later offering of the company's securities. Going public through a reverse merger allows a Private Company to go public typically at a lesser cost, is extremely efficient time wise with less stock dilution than through an initial public offering (IPO). While the process of going public and raising capital is combined in an IPO, in a reverse merger these two functions are unbundled; a company can go public without raising additional capital. Through this unbundling operation, the process of going public is simplified greatly, with cost and timelines significantly reduced.
The Private Company, which has gone public, obtains the benefits of public trading of its securities, namely:
increased liquidity of the ownership shares of the company
Higher share price and thus higher company valuation
Greater access to the capital markets through the possibilities of a future stock offering
The ability of the company to make acquisitions of other companies using the company's stock
The ability to use stock incentive plans to attract and retain key employees
Going public can be part of a retirement strategy for business owners
Going public can be part of a strategy to lower the percentage of share ownership by the sale of shares to the public by the current owners thus converting ownership to cash for retirement or other purposes
The benefits of going public through a reverse merger, as opposed to an IPO, are the following:
The costs are significantly less than the costs required for an initial public offering
The time required is considerably less than for an IPO
Additional risk is involved in an IPO in that the IPO may be withdrawn due to an unstable market condition even after most of the up-front costs and considerable management time have been expended
IPOs generally require greater attention from top management
While an IPO requires a relatively long and stable earning history, the lack of an earning history will not normally keep a privately-held company from completing a reverse merger
The company does not require an underwriter
There is less dilution of ownership control
You will receive a higher valuation for your company
Requirements prior to entering into a reverse merger are the following:
A Private Company will require approval of its stockholders for a merger with a public corporation
Once a company is taken public through a reverse merger the financial markets hold the following future prospects in the capital markets for the new Public Company:
The market value of a Public Company is often substantially higher than a Private Company with the same structure in the same industry
Capital is easier to raise for public companies because the stock has market value and can be traded
The public trading price of the Public Company's securities serves as a benchmark for the offer price of a subsequent public or private securities offering
Acquisitions can be made with stock since publicly traded stock is viewed as currency for mergers and acquisitions
Stock can be issued for officers, directors and consultants
If the stock distribution has included warrants, the new company can receive proceeds from the exercise of those warrants if the trading price of its common stock exceeds the exercise (strike) price of warrants.
Interesting reading ...
http://securities-law-blog.com/tag/form-8-k/
Thanks KS ... Talk about Riverboat gamblers ... those MM's are gonna get blindsided BIG TIME if we get news after the bell and the stock gets halted on the effective date 12/6 this weekend.
Watching this play out is worth the price of the admission !!!
Best to all ...
Red
Help me understand where the dilution or "shares" are located and coming from? Seriously I would like to learn something here.
If both companies executed a contract, I assume they have identified all the AS and OS shares so they can lock the deal in ( which they did on 11/18/10) with no funny business until the deal is filed.
Sp how would dilutive shares show up aftet the parties and their lawyers have identified and quantified all the shares for the sake of the transaction?
TIA
Red