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Strategies & Market Trends : YEEHAW CANDIDATES

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From: rrm_bcnu	7/26/2005 8:13:17 PM
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Going Public Without an Initial Public Offering (IPO) A Reverse Merger is a method by which a private company goes public without having to traverse the long and laborious undertaking of an Initial Public Offering or IPO. In a Reverse Merger, a private company (TXP Prototypes) merges with a publicly listed company with little or no assets and no liabilities (SMKT). The public company is most commonly called a "shell" corporation because all that exists of the original company is its corporate shell structure. By merging into such an entity, a private company becomes public. In a Reverse Merger, the private entity acquires the public entity in a financial sense, but then takes on the corporate structure of the public entity. The merger is called a "Reverse Merger" because the surviving entity is the public company even though the private company had the assets and liabilities to start. In a "Forward Merger" transaction the surviving entity is the acquiring company. The private company merges into a public company and obtains the majority of its stock, usually 80% to 90% (in our case 95.4%). The private company will usually change the name of the public corporation to its own name (in our case TXP Corporation). Management is then selected and a Board of Directors is created (In our case the TXP CEO and BOD take the con). The value of the public shell depends upon numerous factors including, the age of the corporation; the state of incorporation; the number of shareholders; the existence of assets or liabilities and the trading history of the Company. If the new public corporation has a base of shareholders of over 300 it can qualify for admission to quotation on the NASDAQ Small Cap Market. That is our situation. A share issuance that will result in 95.4% ownership by TXP, followed by an approximate 10:1 reverse split is expected. A resulting float of 10M shares is anticipated. With a cap valuation of $100M-$125M, the expected MM push will be from your entry point (approx. .02) to 10 x entry (.20) then a push roughly to .90-1.15 per share. The expected merger announcement is 01 Aug. Please see the SI SMKT board for more DD data. A 4 to 6 bagger is what this is all about. cheers rrm

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