China Dom. Bio-tech Hldgs Inc. (fka CDBH)

[Potse]

temp luvs amy....structure of the deal.....

"What motivation would the owner of the prospective merger target have to just give his company to CCKH? Or was this just a glamorized name change? (I have seen those before) CCKH did not have any cash to purchase a company with. They could have issued convertible debt, and that would not show any immediate change in the O/S, and would carry an interest rate and a conversion clause."

I haven't seen any indication nor have any reason to believe that a prospective RM candidate is just giving its company to CCKH without any compensation. When the CEO is referring to no change in the share structure, I interpret that as primarily a reference to the majority ownership control transaction with the consulting firm.

If I am correct in assuming that the consulting firm is not the actual RM candidate but instead just an intermediary party, this RM deal consists of two parts. First, the consulting firm purchases majority ownership of CCKH. Second, the actual RM will occur when the firm resells some or all of those shares to its RM client and/or additional new shares are issued as compensation to the client. And it is reasonable to assume now (based on the name change, website picture, possible Belmont Partners involvement) that the reverse merger client here is most likely a China-based or China-focused company.

The information from the CEO regarding no change in the share structure is very encouraging to me because it basically tells me how the first step of this RM deal will be structured. There are three ways the consultant could purchase control of the shell: 1) buy preferred shares, 2) buy newly-issued shares, which would increase CCKH's pre-merger share count to around 4.6+M, or 3) purchase existing shares, which would maintain CCKH's current share structure prior to any merger.

Since CCKH does not have any authorized preferred shares, that means the consulting firm will purchase existing shares (most likely from the block of shares the CEO owns) to give it 50+% control of the CCKH shell.

What then determines the success/failure of CCKH as a shell investment will be the quality of the RM company/business and the exact structure of the RM part of the deal.