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Technology Stocks : Blank Check IPOs (SPACS) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (1196)	9/13/2007 7:50:13 PM
From: jrhana	Respond to of 3862

From what I can see, ESA is a textbook example of a SPAC with $6 units and two warrants attached. <The management team of a SPAC typically receives 20% of the equity in the vehicle at the time of offering, exclusive of the value of the warrants. The equity is usually locked up for 2-3 years and management normally agrees to purchase warrants or units from the company in a private placement immediately prior to the offering. The proceeds from this sponsor investment (usually equal to approximately 2.0% of the amount being raised in the public offering) are placed in the trust and distributed to public stockholders in the event of liquidation. In many cases, management agrees to pay for the expenses in excess of the trusts if there is a liquidation of the SPAC because no target has been found.> en.wikipedia.org Of course, they will lose all of their warrant investment and receive nothing for their $0.01 shares, if the deal is not approved and consummated. If the warrants are exercised, of course, they will put up another 15 million. In addition from page 8 of a SEC schedule 13 D of 9/6/06: The following transactions were effected by or on behalf of the Marshall T. Reynolds during the past sixty days: Date Shares Price ------ -------- ------- 9/6/06 325,000 $6.00(1) ---------------- (1) Mr. Reynolds purchased 325,000 Units (consisting of one share of Common Stock and two warrants) in the Issuer's initial public offering. sec.gov So I believe Marshall Reynolds has put in over 3 million personally into the deal. If the deal does not receive the full 80% shareholder approval, ESA management has the right to buy up enough shares to reach 80%. I believe that they would do this. I believe that Marshall Reynolds is confident that more than 80% of the shares are in friendly hands. Included in the friendly hands would be Acqua Wellington which just filled a 13G with the SEC showing purchase of 738,900 shares or 6.78% of the outstanding shares. sec.gov The best way to insure approval would be to quickly get the share price well above $6. Why turn your shares in if you can get more than the guaranteed $5.78 in the open market?