To: emmett who wrote (6744 ) 6/8/1998 11:28:00 PM From: Ice Cube Respond to
There are 7 million shares in the float. Small companies finance them selves through a 504 offering. I will take you through this nasty game in an example. I will simplify it so it is very easy to understand. Lets say out of the 7 million shares, an offering (504) was done with 3 million shares at a price of .25 cents. The company recieves $750k, the other side gets 3 million shares at 25 cents. The stock gets promoted, and guess who sells into your buying ???? Now figure out how much money can be made on a transaction like this, and you will see the huge amounts of money involved. The stock could be sold at 25 cents, a nickle or whatever. I would also suggest that these types of transactions are structured in Europe. Lots of reasons for that, namely nominee accounts. Sometimes you would be surprised who the owner of the 504 stock really is. Read between the lines. The insiders scream they never sold one share. But, the company gets some money, the 504 folks pocket MILLIONS, and on to the next financing. There are a lot of ways to skin this cat, I only showed you one of them. Like I said, no new tricks to this game, just new twists in how its done. That's why the SEC came down on the Reg S deals.... The stock was being blown back in to the market way before the restriction was up. But when you are offshore, restriction doesn't matter, you have the stock to back your trade, and a good relationship with with an offshore banker, and the sky is the limit. All I am saying is that when the form 10 comes out, read every single word and you will see how things were dome. Were they done as I described here ??? We don't know until we get the form 10. Like I said, I am not in the least bit saying that this is what PNLK did, what I am doing is showing you how these small companies get funded. After all, money for a start up is very hard to come by without giving up most of the equity to a VC firm.
