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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: reno4 who wrote (42550)	5/6/2011 11:05:02 AM
From: E_K_S	Respond to of 78763

All public shell companies are not frauds or are bad. In fact sometimes they are set up to separate potential liability for the owners. My only point was several of those that I have seen that were Florida shell companies were not always on the up and up. Procyon Corp. was set up using a shell corp as stated in their 10K. From their Web Site:"...Procyon Corporation (PCYN:OB) was incorporated in the state of Colorado on March 19, 1987 and acquired by John Anderson in 1995 through the purchase of a public shell to engage in the acquisition and development of medically-related entities. Based in Clearwater, Florida, Procyon was deemed a development stage company until acquiring Amerx HealthCare Corporation (Amerx) in 1996..." Electronic Control Security, Inc. was founded in 1976 and was not set up using a public shell. The founders incorporated their business in New Jersey and that is where their headquarters are located (Clifton, NJ). I am not sure what you mean by "why would EKCS be formed as a shell company?". When you see that a public shell company was used to form a company (especially w/i a year), just be cautious and do a bit more due diligence. Many of these Chinese companies used reversed merger existing U.S. public shell companies as a means to control their business. This provided a quick way for them to trade on the NSADQ and/or pink sheets and/or Bulletin Board exchanges. The SEC financial reporting requirements are much less for many of these shells especially if the dollar and/or share prices are below a set minimum amount. Unless a company has a pretty good reason to use a previous established public shell entity, I usually just avoid them. FWIW Voyager Oil & Gas, Inc. (VOG) was formally a public shell company called ante4, Inc which was originally set up as an online poker business. From their 10K:"...On April 16, 2010 ante4, Inc. ("ante4") completed the acquisition of Plains Energy Investments, Inc., a Nevada corporation (the "Company") pursuant to an Agreement and Plan of Merger (the "Merger Agreement"). Subsequent to the Merger, ante4 changed its name to Voyager Oil & Gas, Inc. Under the Merger Agreement, Plains Energy Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of Voyager, merged with and into the Company, with the Company remaining as the surviving corporation and a wholly-owned subsidiary of Voyager (the "Merger"). Currently, Voyager is a holding company parent of the Company, and Voyager's business operations following the Merger are the same as ours...." ante4 was used as the "shell" to form the wholly-owned subsidiary called Voyager Oil & Gas. VOG merged with Plains Energy Acquisition, Inc. where all their E&P land assets are controlled. ante4 later changed it's corporate name to Voyager Oil & Gas. Public shell companies are pretty common in the micro cap Oil & Gas and mining business. EKS