Greater China Corporation
Corporate Headquarters
One Rockefeller Plaza, Suite 1010
New York, New York 10020
Tel: (212) 765-4547 Fax: (212) 218-4223
GREATER CHINA CORPORATION
December 16, 2008
To Our Greater China Shareholders:
As 2008 draws to a close we thought it would be useful to summarize where we stand and what our plans are for Greater China Corporation (“GCC”) in 2009.
2008 Summary
1. Corporate
Having been informed by the SEC that we could not become fully compliant unless we filed all historic financial documents, and since these documents were not available from our former international affiliate, we stopped trading in the U.S. and formed a new company, Greater China Corporation, Ltd. (GCCL) in Bermuda. This was an advantageous move for attracting international investors as well as for potential tax reasons as most of our operations will not be generating U.S. based revenues.
Approvals were obtained to have a one-for-one exchange of GCC shares for those of GCCL so that each shareholder would have the same exact ownership in GCCL, and then GCCL would hold GCC as a wholly owned subsidiary. Internal financial statements were prepared as well as a draft SEC Form 10 to list the GCCL shares.
Additional Advisors were added during the year (see attached) to provide Greater China with very substantial management depth, expertise and contacts for doing business with China.
2. Financial
In order to finance the legal and auditing costs of the new domicile and listing, to provide limited seed money for our developing Projects, and to cover our very low overhead, additional 10/10 Convertible Notes were made available to existing and new investors. Limited amounts were taken up primarily by current directors, advisors and shareholders.
Although GCC has received numerous offers for highly dilutive financing from third parties, we have refrained from accepting these since our motto has always been “ to protect and enhance the value of every GCC share.”
We then decided to open the 10/10 Note offering to important individuals who we felt could add substantial value to GCC, particularly in conjunction with some of our Projects. More than a dozen such wealthy individuals were approached, all expressed interest, none said no, however due to deteriorating financial markets final decisions have been put on hold.
Therefore, in order to finance the completion of the audits and SEC filings for early in 2009 a special year-end offering is being made to existing shareholders only. This has three special conditions that are enumerated in the attached Subscription Form which is very time-sensitive.
3. Operations
We expect global conditions to be very difficult well into 2009. However, we believe we are better positioned than most companies to weather the storm and to take advantage of the numerous opportunities that continue to come to our attention.
We have no corporate debt, very low overhead, and yet an extremely experienced team of Directors and Advisors who are eager to become involved with GCC and our underlying Projects. We are also able to adapt quickly to changing circumstances and new opportunities. A list of some of our Projects is attached hereto and is available on our web site.
Funding for many of these Projects is difficult in today’s environment; however we are continuing to improve their business models so that as market conditions improve we will be ready to respond very quickly.
Since investment funding has been mostly frozen, we are pursuing a number of revenue generating agreements with Chinese orgnaizations which can contribute to our cash flow in the short term and lead to more substantial partnerships in the longer term.
2009 Action Plan
1. Corporate
After ongoing discussions, the SEC will now allow us to file a new Form 10 with two years of audits to reinstate GCC as a publicly traded company. This is excellent news, and as a result we plan to complete this, and to regain public trading as early as possible in the new year. Our estimate is that this will cost approximately $100K which we hope to raise quickly from internal sources since this important step will provide both value and liquidity for all our shareholders. Without this support, we cannot control the timing of re-listing and renewed trading.
We are investigating ways to use GCCL for its original purpose and also as an additional asset for our shareholders.
2. Financial
Our top priority is to secure the funding for the new share listing. We have therefore designed a special incentive package for existing shareholders which we hope will result in quickly funding this critical need. (Please see the attached). Several of our Directors and Advisors have already responded favorably.
In parallel with this we are completing Business Plans for several of our underlying Projects to present to larger investors. This will not only bring value to GCC’s ownership in these companies but also provide new and ongoing management fees for GCC.
Once we are relisted and can achieve a stronger share price, we intend to utilize private placements to provide additional seed money to accelerate the growth of these Projects.
3. Operations
Our emphasis in the short-term is to achieve positive cash flow primarily from fee income with several China based organizations that want to expand into the U.S.
In the medium term we plan to accelerate development of our underlying Projects and companies and to capitalize on the many strong relationships we have in China and other parts of the world.
In the long-term we will stay with our original business model of building substance and value for Greater China Corporation itself as well as using it as a platform for developing companies which can be spun-off to our shareholders to create independent public entities which can achieve added value both directly and indirectly for GCC investors.
We greatly appreciate the support and loyalty that you our shareholders have provided during many twists and turns in the road. Your ideas and suggestions are always welcome. Fortunately, we have survived and attracted an even stronger team of Advisors (new ones are designated by *) who will help us to benefit from the many challenges and opportunities that lie ahead.
We wish all of you a very happy holiday season, and a healthy and prosperous New Year.
John W. Allen Laurence B. Levine |
