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Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper -- Ignore unavailable to you. Want to Upgrade?

To: Ga Bard who wrote (1223)	5/28/1998 8:43:00 AM
From: Ed Hoftell	Read Replies (1) \| Respond to of 4142

GB, What amazes me is how smoothly things have gone for Arcon this past six months. Not typical at all for a BB company--everything must have been carefully planned and thought out. In fact,the biggest problem seems to be that this is moving faster than Fisher and Spriggs ever dreamed! Hoping for a JV, ------ED

To: Ga Bard who wrote (1223)	5/28/1998 10:15:00 AM
From: Jay Lowe	Read Replies (1) \| Respond to of 4142

There are no significant differences in the value to a company of a reverse merger vs. an IPO when the product has yet to be proven and accepted ... this is because at IPO time, the value of the product is not built into the price but must be developed in the market after the IPO. This is the same process for a reverse merger, so in this case the two are effectively the same as a process to create capital for the company ... the capital influx follows the product acceptance, not the IPO completion. IPO's and reverse mergers differ in WHEN they bring money into the company ... IPO bring it quickly, R-Ms bring it as it is developed. IPOs and R-Ms also differ in WHO gets the money ... in the case of an IPO, especially an IPO for a company with an unproved product, by using the IPO technique the company must give up a large fraction of ownership to the IPO underwriter ... the investment bankers who organizes and administrates the offering. R-Ms do not have this built-in cost ... IPOs and R-Ms are basically the same in terms of legal, financial, and due diligence costs ... but with an IPO, you have to cut in the underwriter for a nice slice of the action. R-M's don't. The trick with an R-M is to find a clean "shell", a non-operating publicly traded company with clean legal and financial status, that one can acquire ownership of for little cost. This is what has happened in this case, whereby Arcon has done a reverse merger with Midland instead of an IPO. I consider it a perfectly good strategy for the DF-144 product, since the product must prove itself, as it seems to be doing.