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Gold/Mining/Energy : Naxos Resources (NAXOF)

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To: Rick Nazaruk who wrote (15905)	8/27/1998 4:23:00 PM
From: Henry Volquardsen	Read Replies (2) of 20681

Rick, As John pointed out LLC stands for Limited Liability Company. My experience of them is that they are generally tax driven. As an example I was an investor in a series of real estate limited partnerships that I had purchased in the secondary markets. The general partner wished to convert to a listed vehicle to provide greater liquidity. They opted to convert to an LLC. The reason was it triggered no tax events while conversion to a REIT would have. So you wind up getting the advantages of carrying over the original benefits of the partnership while getting the liquidity of a tradeable vehicle. As far as why Richard suggested it in this instance, I assume he was thinking along the lines of research oriented partnerships which are not uncommon. This would assume that Naxos would raise financing for researching FL and allow those interested to buy in directly. The LLC structure would allow these investments to be more liquid. My own reading of the letter implied more of a spin off approach which would imply each shareholder getting a stake in two distinct companies leaving them free to sell the one they didn't want. Time will tell which approach they are thinking of. Henry

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