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Microcap & Penny Stocks : MTEI - Mountain Energy - No BASHING Allowed -- Ignore unavailable to you. Want to Upgrade?

To: ~Owl who wrote (11033)	11/8/1998 1:34:00 AM
From: Sharon	Respond to of 11684

Generic excerpts from three home pages which advertise reverse mergers: -------------- Reverse Mergers / Shell Companies - Going Public without the cost of an IPO. Many successful private companies are ready to make the transition to the next level by going public. But for some reason they may not be in a position to complete the process of going public through an Initial Public Offering (I.P.O.). Some companies may not need the money from an IPO but still desire to go public. Other companies may not be able to produce the historical financial statements needed to complete the filing requirements. Or there may be some other reason for wanting to go public without completing an IPO. The alternative method of going public is to merge with a company that is already public. There are many companies that are already public but do not have any operations. A private company that mergers with one of these companies would be completing what is know as a reverse merger. In a reverse merger the private company's operations would continue and legally the public company would continue. The net effect is that the private company is now public. There are hundreds of shell companies available for reverse mergers. Some are actively traded and some are not. The cost of these companies can vary greatly. <snip> -------------- Reverse Merger with an Inactive Public Company: We can supply a publicly listed company with no assets or liabilities. By merging into a such an entity, a private company becomes public. To realize the full value of being public, we help establish an after market for the shares. Merging into a public entity does not directly raise capital but can still be a valuable method for growth. Small amounts of capital can be raised through the sale of treasury stock. Acquisitions can be made with stock - publicly traded stock is viewed as currency for mergers and acquisitions. Capital is easier to raise through public or private placements because the stock has market value and can be traded. The market value of a public company is often substantially higher than a private company with the same structure in the same industry. Going public with this method can be part of a retirement strategy for business owners. <snip> --------------- <snip> Fewer than 1 percent of companies enter the public arena through a reverse merger. It is less costly than a traditional initial public offering (IPO) because there is no underwriter to finance the deal, and government scrutiny is less intense. There is no need for an underwriter since the company with which the reverse merger is done already is publicly traded. <snip> ---------------

To: ~Owl who wrote (11033)	11/8/1998 1:39:00 AM
From: Sharon	Respond to of 11684

FWIW.....some Reg S insight...compliments of a SI poster As far as shorting the stock you can through Canada but they require a 2 for 1 margin. If you short 1 share of a $3 stock they want $6 in the account. If the stock moves against you, the requirement is the same, 2 for 1, although not heavily enforced, they will let the stock move quite a bit before they call for more money. The thing that this will really stop is the following: First there have already been rule changes in the last year. Before when public companies (fully reporting ones) wanted to raise money they needed to go through a full blown registration statement and a comment period. When the public saw the shares coming and saw obvious dilution, the share prices fell. So a loop hole was created. An exemption to the registration rules under the Securities Act called Regulation S. Regulation S simply stated that if the buyer was a foreign entity it could be issued to him, with a restricted legend but the legend could come off in 45 days. The Reg S buyer to protect himself against the potential downfall of the stock, would put a clause in the stock purchase document that said, if the stock falls in price that the company would have to issue more shares to cover the difference. What did that do, well here goes. First though, the Reg S offering was not disclosed to the public so they never knew what hit them. I the Reg S holder bought the stock at $5. I start shorting the stock down to $3, I then try to cover my position. If I cover I made $2, If i couldn't cover I tell the company issue me more shares. So they had no downside. They good indefinitely bang the stock with no downside, make the money trading the stock and make the company cough up more shares. This was the death of many companies and destroyed unsuspecting investors. Examples of Reg S stocks, TIRE, CCEE, JAVC, SYQT, forget it there are hundreds. So the SEC put new rules in last year that if the company did a Reg S, they had to file an information statement 8K within 15 days to notify the public and in conjunction with the new rules changed the holding period on Reg S to one year and shortened the holding period on 144 stock to one year. So out the window went that abuse. So left was the abuse of the non-reporting company who's only requirement is to file an annual financial statement with the state in which it is incorporated. In the meantime, there is an exemption under the SEcurities Act under Regulation D, Rule 504 which allows a non reporting company to raise up to $1 million in an offering and can issue as many shares as they want for that $1 million, and guess what they don't need to tell you. So when you see the shares go from 10 to 18 million and you don't hear it from the company, that is one of the perils of buying non-reporting BB stocks, that is why the SEC intends to stop this last loop hole for non reporting. So hopefully the abuses will be limited after the new rules come into effect, although there are dozens of other underhanded ways that these BB companies and promoters skate around the rules.

To: ~Owl who wrote (11033)	11/8/1998 1:41:00 AM
From: Sharon	Respond to of 11684

From: jhild Friday, Oct 30 1998 10:03AM ET =20 > =20 > Well, I suspect that the game is a little simpler. The = >principals that have these restricted shares can move them off shore. = >They then proceed to short against them. In effect they are covered = >short positions, as they have the underlying shares as an offset, if the = >price were to rise. But after the stocks have dropped significantly, and = >believe me if you know there is no underlying value you can be assured = >that the price is sure to drop, then you can cover maybe at pennies on = >the dollar, or maybe not ever at all. Interestingly if you never close = >out your short, there may not be a taxable event.=20 > > But as the info you provide shows there is more than one way = >to profit offshore. Reg S offerings are their own little snake pits of = >cautions for common shareholders. When companies are not reporting, = >shareholders are flying blind, and have to depend on the truthfulness of = >management. This is why I call for financial filings - all the time. > > = >*************************************************************************=

To: ~Owl who wrote (11033)	11/8/1998 1:45:00 AM
From: Sharon	Respond to of 11684

So what's the point?????? This little scam can be run over and over and over. Do a reverse merger, issue stocks (of course that's after the reverse split) ship the shares to an offshore account, use em to cover offshore short trading sell out at a tidy profit cover shorts for pennies on the dollar as stock plunges to new lows. Now if you happen to have some insider trading information when all this is going to transpire you too can get out with a nickle. Of course insider trading is illegal last I heard. If SEC doesn't find chargeable offenses MTEI goes up on the "Shell For Sale Block"/"Reverse Merger" and we may get to watch this party all over again. Except this "new" company now has the MTEI stigma and folks aren't going to be so quick to buy the pump and dump. Now let's assume Marc Tow has the big piece of the pie and if in fact his shares are voting shares. HE makes the decision who the shell is sold to or who is a candidate for a reverse merger. What is the "we stuff" we clean up the shell, we do a reverse merger? How can you assume this not knowing who owns how much??? Let's STOP this babble now. It is all speculation and the best one can do is pass information to the people who have the authority and/or resources to sort through what has occured. "And on the 7th day He rested" Have a good Sunday!