The Reverse Merger's CFO knows that public company has a hundred times better odds of raising risk capital from accredited investors. The CFO can offer potential investors liquidity, after one year, and leverage by discounting price of Private Placement shares. What CFO needs is a public company with strong and sustainable share price to attract investment interest. And therein lies problem, "poison pill" ignored by most CFOs.

It costs money to find buyers for any stock. Public companies are responsible for finding buyers of their stock for as long as company is public. In our example above, OTCBB Company with a float of 500,000 will cost public company about $400,000 to maintain a $3/share price. The poison pill is fact that shell company's insiders will sell their shares into market at $3/share. The shell company insiders make 13.5 million dollars from sale of their shell.

This will create a float of 5 million shares and Reverse Merger Company must pay an annual four million-dollar investor relation's bill that they rarely can generate from corporate income. The result is death of another fledgling company. There's a loss of investment capital. And, community loses jobs. The only winners are shell company insiders and Dr. Kevorkians from Texas to New York, who supply reverse merger suicide service.

CFOs have more than two ways to take their private company public. They should look at possibility of a corporate death pill in any alternative they consider. A little research is ounce of prevention that avoids a meeting with Dr. Death.

To contact author: Visit Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]

Exploitation in Right to Buy Scheme

There have been several schemes where third party companies encourage tenants to purchase their homes under right to buy scheme, by offering them cash incentives. The tenant purchases property at a discounted price under right to buy scheme and simultaneously exchanges contracts to sell property to company after 3 years at which point no discount penalty will be repayable. The tenant will lease property to company and move out of home with a cash sum. This leaves company free to rent out property at current market rental rates.

After three years tenant sells property to company. The company will either continue to rent property at market rates or property will be sold on at a substantial profit.

The incentive for tenant is lump sum offered, which can be anywhere from £5000 to £26000 but is usually a percentage of equity of purchased property. This could be attractive to tenants who do not wish to purchase their current home or hope to purchase a property in another area as it will give them a ready made deposit to buy another home.

The new proposals are designed to make this type of sale less attractive and prevent profiteering as well as securing local housing for less well off. The proposed changes in section 180 and 182-189 of Housing Act 2004 will come into effect on 18/1/2005.

For more information on a right to buy mortgage, visit Right To Buy website at Right to buy website.