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Statements in these profiles that are not descriptions of historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expect," "intends," "believes," "plans," "anticipates" and "likely" also identify forward-looking statements. All forward-looking statements are based on current facts and analysis. Actual results may differ materially from those currently anticipated due to a number of factors including, but not limited to history of operating losses, anticipated future losses, competition, future capital needs, the need for market acceptance, dependence upon third parties, disruption of vital infrastructure and intellectual property rights. All forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the Securities and Exchange Commission.

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Disclaimer

Spinoff Benefits

SPINOFF BENEFITS

Going Public via a Spinoff offers many Benefits:

  • The private company can configure the company to meet its particular needs, such as amount and classes of stock, warrants, etc. Thus avoiding the costs and time to structure the proposed reverse merger company with a shareholder vote, including outside shareholders
  • A smaller percentage of the private company's shares are distributed as a spinoff as compared to a existing she ll company. This helps to safeguard the corporate ownership of the existing shareholders without worrying about continuing dilution for future financial transactions
  • Companies may also desire a stock dividend distribution to a traditional reverse merger with a shell if it wants a certain structure it does not find in a shell, such as, callable warrants to raise money, a larger shareholder base to make it easier to mover from one exchange to another, establishing the public market without worry about carry-over options, warrants.

Information to Complete a Spinoff

  • Business plan with a balance sheet and current financial information along with a 3 year detailed projection.
  • Management information, including completion of the "Officer and Director Questionnaire," for all Officers and Directors designated by the company to be listed as the new Officer and Directors of the public company.
  • Corporate Information, A copy of the Articles of Incorporation, Certificate of Good Standing, By-Laws, all Board Resolutions and Minutes, Shareholders list and completion of corporate questionnaire and all supporting information.
  • Audited Financial Statement, conforming to GAAP are required from the company. The audit statements of the company have to be consolidated with the public company's financial statements and filed in an 8K on the day of closing.
  • Consent from the Board and a majority of Shareholders, with private companies that usually have a minimal shareholder base 100% approval is granted, but in some case private placement or financing have occurred and a majority consent of the existing shareholders of the company is required.
  • Satisfaction of warranties and representations, The transaction will be subject to all reps and warranties being made in the agreement have been satisfied.

As a Public Company...

Once a company is taken public through a reverse merger the financial markets hold the following future prospects in the capital markets for the newly public corporation:

The market value of a public company is often substantially higher than a private company with the same structure in the same industry.

  • Capital is easier to raise for public companies because the stock has market value and can be traded.
  • The public trading price of the public company's securities serves as a benchmark for the offer price of a subsequent public or private securities offering.
  • Acquisitions can be made with stock since publicly traded stock is viewed as currency for mergers and acquisitions.
  • Form S-8 stock can be issued for officers, directors and consultants.
  • If the stock dividend distribution included warrants, the new company can receive proceeds from the exercise of those warrants if the trading price of its common stock exceeds the exercise (strike) price of warrants.