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Gold/Mining/Energy : Capital Alliance Group - CPT (CDNX) -- Ignore unavailable to you. Want to Upgrade?

To: keith massey who wrote (313)	4/17/2000 11:21:00 PM
From: keith massey	Read Replies (3) \| Respond to of 960

Here are the comments from Beararn which I think are worth reposting. It is going to take me a day to write the response because there are now so many new things to talk about now - like CIBT going to OTC <ggg> Here is the comments . . . I have been thinking about Mr Chu's responses and I would like to bounce some thoughts off you folks . I am particularly interested in hearing other people's takes on the issues.. 1) CIBT spinoff. Keith, you were right about Mr Chu - he is very impressive. The spinoff would appear to be a done deal. Before this response, I found myself wondering when they would do it, hoping it be before the SEG spinoff, as it would give us more liquidity re v.cpt (and in truth, I originally would have sold my shares and bought more v.cpt). Mr Chu, however, he is way ahead of me and making the decisions a lot tougher for me. Why would he do it on the OTCBB? The only reason I can think of is that it can be done more quickly and he wants to unleash these assets before the SEG ipo. And he certainly doesn't want to hold up the SEG ipo in favor of one for CIBT on the GEM - when the market is right he wants to jump in with SEG? Not only is he going to bring this asset out, fairly quickly (I think), but he has a partner lined up and seems to quite pleased about the "synergy" created. I don't think Mr Chu gets excited very easily, so I am more than a bit eager to find out who the partner is going to be. Anyone got any leads? I am not experienced a reverse mergers, but I assume that cpt stockholders would be distributed some pro rata number of shares in the new company? Is this true? 2) SEG ipo. I found his comments very intriguing. First, it appears that the neither the funds nor the level of fund, from the ipo, are jeopardized by any market downturn - confirming what Keith has been telling us (and confirming it during a severe market correction and after discussion with brokers and underwriters) . Market conditions can, however, serve to postpone the ipo. Second, it looks like the ipo will not be until at least October now, independent of market conditions, and possibly later, depending upon market conditions (when he thinks he can get full value). Third, he does not need the money - that is, he is willing to wait as long as it takes for the ipo, but business will proceed apace nonetheless. CPT is quite unique in the sense that they are not doing the ipo because they need the money to run their business or pay for something tomorrow. It's quite a position of strength. Fourth, I find myself fantasizing about what he's gonna do with the money when he does get it - the next 60 mill or so from the ipo. He's got 19 mill in the bank and that apparently will cover any needs for quite a while. I don't see a great cost for the day to day operations, and it will soon be covered more and more by the income generated . Give a guy like this a wad of money to invest and I find myself wanting to stick around to see what he is gonna do with it (and how that investment will be capitalised). 3) Why 2 partners for each exchange. His answer just brings up 10 more questions for me, so I will look forward to reading the reactions of other posters. 4) Why can't Schwab (or others) just buy a local broker to break down the "wall"? I found his answer most comforting. First time I have ever loved red tape. I find it immensely comforting that Schwab and others have already tried this and it has not worked. The reasons given - protectionist policies (strict foreign competition rules, foreign ownership laws, "mountainful of red tape", restrictions on majority control, etc- may not continue as China grows, but by then CPT will be a virtual monopoly. I had real worries about the role of competition, but the fact that Schwab has already tried and has decided that partnering is a better way to go (the only way to go, for now) is music to my ears ( "the hills are alive?..with the sound of tape"). I do not know whether the same principles apply in other countries - as freer trade seems to be a global trend and other countries may be further along in that regard. Concerns about competition may be somewhat more of an issue outside of Asia, particularly in western nations?. 5) websites. I will be quite relieved to have the websites updated, tho it seems like we have been hearing that it is imminent for quite awhile. I was not sure what he meant about having the SEG website up by the end of the week - does that mean that we can buy stocks in china next week?

To: keith massey who wrote (313)	4/18/2000 11:59:00 PM
From: keith massey	Read Replies (2) \| Respond to of 960

A: YES, WE ARE HOLDING A CIBT DIRECTOR'S MEETING IN 3 WEEKS TO APPROVE THE RESOLUTION OF A REVERSE MERGER SO THAT CIBT CAN BECOME TRADING ON THE US OTC-BB. THE TARGET COMPANY IS BACKED BY DIRECTORS COMING FROM THE EDUCATION BACKGROUND, TO BE PRECISE, A PROFESSOR IN CLINICAL PYCHIATRY. WE FEEL VERY STRONG SYNERGY AMONGST THE PARTIES. This is amazing news and should add significantly value to the shares of CPT. So now we have two new listings to look forward to in the near future. You asked about reverse mergers and what is the normal protocol. A reverse merger is an efficient and inexpensive way to bring a new company onto an exchange. I called CPT's IR person after I read your post and it appears that they are planning on doing their reverse merger with a shell company. As a point of clarification, a shell company generally has little or no cash, they don't have an active business, and their primary attraction is that they do have trading shares, a name, and most importantly a listing. So right now there is a shell company listed on the OTC BB that after the reverse merger will become CIBT. Often as a result of a past rollback, the shell company normally only has a small number of outstanding shares. In order for the reverse merger to take place, the OTC BB company will issue CPT a given number of shares (e.g. 5-10 million shares). CPT will then have ownership of the OTC BB company through ownership of these shares. After the reverse merger, the OTC BB company will change its name to CIBT (or possibly a new name) , and bring on a new board of directors. I am not experienced a reverse mergers, but I assume that CPT stockholders would be distributed some pro rata number of shares in the new company? Is this true? To answer your questions, shareholders of CPT will not receive shares of this new company directly but will hold them indirectly through their CPT holding. So why will this listing likely add significant value to CPT? The most obvious one is supply and demand. The audience for CIBT will likely go up by a factor of 10 or more when they list in the U.S since the large majority of U.S institutions and retail investors do not watch or invest in CDNX listed stocks. With a larger audience following the stock after the U.S listing and a tight share structure because of the new shell, CIBT will have far more demand and less supply which should result in a significantly higher valuation for CIBT - simple economics <ggg>. By spinning off CIBT into a separate company, the current fundamentals and potential for CIBT should be better realized. A good example on how investor will normally value the subsidiary at a significantly greater value once it is split off from the parent company is the 3COM/PALM spin-off on March 2, 2000. Two weeks before 3COM spun off their PALM INC subsidiary into a separate company investors were willing to give 3COM and PALM combined a market capitalization of only $25 Billion. However when PALM began trading as its own company on March 2nd investors couldn?t get enough of PALM and valued the company as high as $93 Billion on the first day of trading. The price of 3COM went up 70% in the week leading up to the PALM spinning off. There were no major fundamental changes in either company and yet investors were willing to value both the parent and the new company at far higher prices after the spin-off. (Note: I don't think investors will value CIBT at $93 Billion but did think it was a good example <gg>) It is very unlikely that CPT would spin-off CIBT onto a new exchange without putting out some positive news on CIBT. Mr. Chu hinted at great things to come in his above response when he mentioned partners and synergy. In the December 31, 1999 BC form 61 on Sedar the company states: Recognizing the power and possibilities of the Internet, CIBT is now developing a series of online business education programs in order to benefit students by enabling them to enhance their qualifications at the lowest possible cost sedar.com I would guess we see some major developments in the online program when CIBT starts trading in the U.S which can only increase the value of CIBT. When I visited CPT in Vancouver I was informed that there was a recent ruling in China on which companies/schools can provide online education programs in China. I don't have the exact numbers but the ruling stated that any companies/schools offering credited online education had to have had physical schools in China for X number of years and also have X number of years of experience along with a bunch of credential. The goods news is that CIBT fits all of these regulations. The bad news for almost every other online education units in the US, etc. is that none of them do. CIBT will be the only online MBA education program in a country of 1.2 billion. In addition, The China Education and Research Network (CERNET - edu.cn, funded by the Chinese government, has been establishing a nation-wide education and research network infrastructure to support education in and among universities, institutes and schools in China using the up-to-date telecommunication and computer techniques. Best Regards KEITH

To: keith massey who wrote (313)	4/19/2000 9:21:00 PM
From: AriKirA	Respond to of 960

Hey Keith, As you well know, I've been quite busy with work lately but I must say that I am astonished to see the quality of the information posted on this thread... Had some catching up to do but it was well worth the time. 1) Is there any progress on the IPO for CIBT - we haven't heard anything since the 3Q (October) report. I personally think the value of cibt may be lost in the excitement over SEG, and I would look forward to that hidden value being unleashed. A: YES, WE ARE HOLDING A CIBT DIRECTOR'S MEETING IN 3 WEEKS TO APPROVE THE RESOLUTION OF A REVERSE MERGER SO THAT CIBT CAN BECOME TRADING ON THE US OTC-BB. THE TARGET COMPANY IS BACKED BY DIRECTORS COMING FROM THE EDUCATION BACKGROUND, TO BE PRECISE, A PROFESSOR IN CLINICAL PYCHIATRY. WE FEEL VERY STRONG SYNERGY AMONGST THE PARTIES I noticed you had a very interesting post regarding reverse mergers... I will try to put in my 2 cents worth by responding to said post. That way you'll avoid having to read a boring 5 page essay on reverse mergers in addition to my other bablings...My apologies in advance [gggggg] If the BoD meeting is taking place in three weeks, that means that the reverse merger is a done deal... They most probably have a letter of intent already executed between the parties. One thing that should be noted and I think you already pin pointed said fact (as if you ever miss anything [ggg]), is the fact that each of CPT's subsidiaries have independent and experienced directors who know their way around their relevant fields... Most often, companies just overlook the importance of having different and independent individuals on their subsidiaries BoDs'. A key to a successful venture IMO. Mr Toby Chu definitely seems to be the man to bring this company to the next level... Everything seems to be planned perfectly! 2) When will the website be updated? It would be nice to have all the financials, news, etc in one place, as well as the thoughts of management. A: WE HAVE RETAINED MORE NEW TEAM MEMBERS TO HAVE ALL 3 OF OUR WEB SITES UPDATED. WE HOPE TO SEE A TOTAL FACE LIFT WITHIN 3-4 WEEKS. SEG WEB SITE WILL BE UP WITHIN THE END OF THIS WEEK. I guess that explains all the recent stock options that were granted Message 13328638 Message 13213435 Message 13203615 I remember having a discussion, albeit a very short one, with Taurus about these options. Nice to see the company revamping their web sites. Promotion goes a long way nowadays... and what better way to promote a product/service than by establishing a presence on the net. 4) What is to stop a Scwab from buying a local broker (and their client list, staff, etc) in various countries, instead of trying to partner with them, to overcome issues you mentioned about the "wall".... A: MOST EMERGING COUNTRIES HAVE STRICT FOREIGN COMPETITION RULES, PARTICULARLY IN THE FINANCE INDUSTRY. C.S HAS TRIED MARKET ENTRIES BY ACQUISITION INTO MANY EMERGING MARKETS, BUT ENCOUNTERED MOUNTAINFUL OF RED TAPES SUCH AS FOREIGN OWNERSHIP LAW, RESTRICTION FOR FOREIGN BROKERS TO OWN MAJORITY CONTROL ETC.. MOST MAJOR INSTITUTES ALSO HAVE PROBLEM OWNING ANYTHING LESS THAN 51% IF THEY ARE THE ONE PUTTING UP THE CAPITAL. THEY FEEL VOLUNARABLE. THEREFORE, THEY RECENTLY SWITCHED THEIR MODEL FROM OWNERSHIP TO PARTNERSHIP. THE PROBLEM TO THIS APPROACH IS THAT THEIR POSITION AS A INTERNET BROKER PRESENTS A MAJOR CONFLICT OF INTEREST. LOCAL BROKERS ARE AFRAID THAT ONCE CHARLES SCHWARB IS IN THEIR DOOR, WHAT PREVENTS THEM FROM TAKING OVER THEIR CLIENT BASE Being a securities lawyer, I can corroborate Mr Chu's position... Way too many foreign ownership issues to deal with! Why haven't the US megabanks even tried to firmly establish themselves in Canada? They are limited by the Bank Act which establishes certain criterias that need to be met... one of them dealing with foreign ownership % issues. Same applies with brokers or other such institutions. Finally 5) Is the 75 million or so for the SEG IPO guaranteed, or does it depend upon market conditions between now and the date of the IPO. For example,many IPOs in the US and Canada are being cancelled or postponed because of the large market correction that has taken place the past few weeks. Is this possible in the case of the SEG ipo, or are the funds already committed to you? A few excerpts that speak for themselves THE RECENT MARKET DOWNTURN IS MORE BENEFICIAL THAN DETRIMENTAL TO US BECAUSE WE NOW HAVE A 6 MONTH WINDOW FOR THE MARKET TO RECOVER IN THE CASE OF UNFAVORABLE MARKET, IT IS THE BEST INTEREST OF ALL PARTIES TO POSTPONE, NOT CANCEL THE SPONSORSHIP AGREEMENT... AS LONG AS THE COMPANY CONTINUES TO PURSUE THE BUSINESS, PERFECT ITS MODEL AND AGGRESSIVELY ACQUIRE ITS MARKET SHARES, A FEW MONTHS OF DELAY (IF NEEDED) IS ONLY A MATTER OF PRUDENT BUSINESS DECISION. Kind Regards AK