To: SSP who wrote (37561 ) 3/19/2000 12:27:00 AM From: Jim Bishop Read Replies (2) | Respond to of 150070
KLYS here's a great post from RB: --------------------------------------- By: TTIME Reply To: None Saturday, 18 Mar 2000 at 10:38 PM EST Post # of 4053 *** THE REASON TO OWN KLYS *** By: A-Train Reply To: 2805 by APEX109 Thursday, 9 Mar 2000 at 7:33 PM EST Post # of 2887 Apex109: I'm hoping to help you understand the potential of KLYS. First of all, KLYS is a shell company with no active operations and incoming revenues. They are managed by Hudson Consulting Group, who acquired control of KLYS from the former owners whose coffee-related business failed. Hudson Consulting has progressively removed all debt from the shell, maintained a $4 million tax offset that can be used for the next 14 years to offset future taxes owed, and has made some very shrewd investment. KLYS is a rare shell company in the sense that its current assets (100,000 shares in EAG; 100,000 in HEAL; and 27,000,000 in ARET) already meet the minimum asset requirement to be listed on NASDAQ. So what? Well, the appeal of a clean, fully-reporting, asset-laden shell such as KLYS is that it can be used as a vehicle for a private company to go public. This occurs via the reverse merger process, whereby KLYS would acquire 100% ownership of the private company. Upon completion of the RM, the current KLYS management team would be replaced by the management team of the once-private firm and they would then have control of the corporation. In exchange for all of their hard work preparing KLYS to be an attractive shell, Hudson Consulting will retain something in the neighborhood of 10% of the shares outstanding. They profit as the price rises--obviously, they want to maximize their own profit and will pick a candidate to RM which will achieve a high share valuation. The nice by-product of this is that shareholders of KLYS the shell will automatically become shareholders of the new entity, and thus will enjoy immediate share appreciation. Hudson Consulting has meticulously cleaned up and beautified KLYS to the point that it is one of the best shells out there, if not the best. You simply do not waste the best shell on just an average company. Combine that fact with the information that Hudson has acquired a number of other shells with which to pursue RM's, and you can conclude that it is to their benefit to make a HUGE splash with KLYS. An RM with a well-known and well-respected private firm will immediately raise Hudson Consulting's visibility in this field, and it is my opinion that Hudson is positioning itself as a leader in this reverse merger process. If the private firm has successful operations, and if it is in a hot sector, and if it's growth is expected to continue at a nice pace, then there is a very good chance of this hitting anywhere in the $6-$10 range on the first day the RM is announced. On top of that, if the candidate is actually well-known, the recognition factor could propel the stock as well in the ensuing days, weeks, and months. I tend to look at the potential by market capitalization. The OTC is filled with companies with no existing revenues (but in hot sectors) which sport market capitalizations of $300 million or more. Now, if the reverse merger candidate is in a hot sector and has existing succesful operations and good growth prospects, then is it too much of a stretch to assume that they too could attain such a market cap? I think so, and that translates into about $6/share. Furthermore, do you think Hudson Consulting is looking for a company which will remain on the OTC? Doubtful--with KLYS already having the assets to qualify for NASDAQ listing, wouldn't it make sense to locate a NASDAQ quality company who wants immediate access to the capital markets and thus foregoes the lengthy IPO route in favor of a reverse merger? And wouldn't it makes sense that the NASDAQ application could be submitted soon after the RM? These are just some of the scenarios and it is all speculation. But it is what I like to call calculated speculation--we know a lot about the intentions of the group controlling this shell and we know that they have done this successfully in the past. There is no reason to think that KLYS will not be their biggest success yet. Good luck and I hope you join us!! A-Train