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Gold/Mining/Energy : JAB International (JABI) -- Ignore unavailable to you. Want to Upgrade?

To: ladystaed who wrote (3709)	5/12/1998 8:13:00 PM
From: DDS-OMS	Read Replies (1) \| Respond to of 4571

If you were ever involved in private placements, I'm sure you would have found out those things. If you haven't participated in a PP, why would you have previously cared anything about the intricacies of restricted shares? Now that it materially affects you--that is, what is taking place with 2/3 of the outstanding shares of BCMD--it is important that you, and all BCMD investors, understand what is going on. The law (SEC regs) state that a company can issue shares without going through the formality of registering these shares with the SEC as a means of quickly raising cash. It is specifically meant to help companies in a cash bind. They can raise cash, and then later apply for registration of the stock issued. To prevent a company from issuing shares and then simply never registering them so they can't be sold, the reg provides that if not registered within 1 year, the owner of the shares can, in effect, register them himself. BCMD started selling the pp shares at 7-10 cents in February of 1997, and continued to sell them all year. In December, they were trying to sell them for 50 cents--but I don't know if they placed any at that price. A total of about 30 million were sold. BCMD promised to file a registration statement by Dec 31, 1997--which they did do on Dec 21. Normally, it takes 30-45 days for the SEC to accept the registration. In this case, the SEC responded by asking for more details, and BCMD wasn't in any hurry to reply--taking, I'm sure, the full time allowed to respond. This may have happened a second time, as it is now almost 5 months later, and the shares still aren't registered. Especially with this delisting specter hanging over them, I don't think BCMD was in any hurry for all 30MM shares to suddenly become tradable in Feb or March. By stringing out this registration process as long as possible, BCMD is managing to have these PP shares released slowly by 144 filings rather that in one huge tranch. Smart business, but not something I appreciated<g>. Frankly, if my 1 MM shares were registered as expected in February, with the inability of BCMD to stay above $1 and a coming reverse split obvious to all except the blind, I would have sold a lot if not all in the last 2-3 months, and repurchased now. As far as where to get the info, some of it comes from BCMD--if one is involved in a pp, he has the right to know what is happening with their registration. The rest you find out from those involved in a PP--as you are now. Ironically, there are 3 threads that deal with shorting stocks that float a Reg S or a Reg D, and a lot of good background is discussed, such as how they are registered, what filings to look for, etc. A lot of it applies also to private placements. Used to be active in them, but not for a long while. Here is the root URL for the 3 subgroups and the initial statement of the thread initiator and the first few replies pertain to the basics---the later postings deal mostly with possible short candidates. This only has 30 posts and then died, but the 3 subgroups are still active. A lot of valuable information if you want to take the time to read. Look for BCMD to fit in subgroup 1 (Broken stocks). Subject 15249 Incidentally, anyone who says these pp shares can be sold before registration apparently has never seen a restricted share certificate. The front of the certificate is stamped twice in large RED letters: LEGEND The reverse has the following restriction--also stamped in RED: "The shares represented by this certificate have not been registered under the Securities Act of 1933. These shares have been acquired for investment and not for distribution or resale. They may not be mortgaged, pledged, hypothecated, or otherwise transferred without an effective registration statement for such shares under the Securities Act of 1933 or an opinion of counsel for the corporation that registration is not required under such Act." Just try to sell something with this defacement!!! LOL. Also, no broker will let you short against the box by using these restricted shares as collateral --because if you had to cover, these can't be sold. (I tried with another pp--NOT BCMD--and tried ALL over the US and Canada, and could not get anyone to short that particular stock for me.) Regards, Gary