Ableauctions.com Inc. (AMEX:AAC) (the “Company”) is releasing
explanatory questions and answers regarding its pending liquidation and
share exchange transaction with Top Favour Limited, SinoCoking’s British
Virgin Islands holding company (referred to as “SinoCoking”) and the
shareholders of Top Favour Limited, which was approved by the Company’s
shareholders on December 30, 2009 and which is scheduled to close at
5:00pm PST on February 5, 2010 (the “Closing Date”). These questions and
answers assume that the closing will take place as scheduled on the
Closing Date and the events described below will occur as planned by
management. Some of the answers to these questions could change if the
events described below do not occur as planned.
Q: What events will occur on the Closing Date?
A: Assuming that the share exchange closes as planned, the Company will
effect a 1-for-20 reverse split of its outstanding common stock, meaning
that each block of 20 shares of common stock will be combined into one
share of common stock; the Company will complete a share exchange in
which approximately 13.2 million post-reverse-split shares of common
stock will be issued to the Top Favour shareholders under the terms of a
share exchange agreement; and the Company will issue approximately 1.2
million new shares of common stock, including warrants, to private
investors for $7 million in gross proceeds.
Q: I am or will be a shareholder of Ableauctions.com, Inc. on
the Closing Date. What will I receive as a result of this transaction?
A: You will be entitled to receive a proportionate share of the
liquidation proceeds from the liquidation of Ableauctions’ prior
business, plus you will continue to hold shares of common stock of the
post-transaction entity, to be renamed SinoCoking Coal and Coke Chemical
Industries, Inc., that will be adjusted for the reverse split.
Q: I own 2,000 shares of common stock of Ableauctions.com
prior to the Closing Date. If I hold these shares through the
Closing Date, how many shares of SinoCoking common stock will I own
after the closing?
A: 100 shares.
Q: How will the value of SinoCoking common stock be determined
after the Closing Date?
A: After the Closing Date, it is anticipated that the trading value of
the shares of common stock will depend on the value of SinoCoking (Top
Favour and its subsidiaries), excluding the liquidation value of
Ableauctions. The trading price will be determined by and influenced by
various market factors, all of which will be determined by buyers and
sellers in the marketplace.
Q: Where can I find more information about SinoCoking?
A: Please refer to the Company’s Definitive Proxy Statement which was
filed with the SEC on November 27, 2009. This proxy statement contains
information about the business of SinoCoking, including SinoCoking’s
financial statements. This proxy statement may be found online by
Q: After the Closing Date, will I be able to trade my “old”
shares of common stock of Ableauctions?
A: No. Assuming that the closing takes place as scheduled, trading of
the Company’s common stock will be suspended by NYSE Amex prior to the
opening of the market on February 8, 2010.
Q: Where will the new post-transaction shares of SinoCoking
trade after the Closing Date?
A: The post-transaction shares of common stock of SinoCoking are
expected to be quoted, either the next business day or within several
days following the Closing Date, on the OTC Bulletin Board. If a market
for SinoCoking’s common stock develops, the Company expects to list its
common stock on a national exchange.
Q: How will the Company determine which shareholders are
entitled to a distributive share of the liquidation proceeds?
A: Holders of the Company’s common stock immediately prior to the
reverse split will be entitled to an appropriate distributive share of
the liquidation proceeds.
Q: I am currently a shareholder of Ableauctions.com, Inc. If
I sell my shares before the reverse split is effected, will I be
entitled to participate in the liquidation proceeds of the Company?
A: No. Only holders of shares immediately prior to the reverse split,
which we expect to be effected at 5:00 p.m. Pacific time on February 5,
2010, will be entitled to a distributive share of the liquidation
Q: I am not presently a shareholder of Ableauctions.com, Inc.
If I were to purchase shares of common stock before the effective
date and time of the reverse split, will I be entitled to participate in
the liquidation proceeds of the Company?
A: Yes, as long as you acquired shares of the Company’s common stock
prior to the effective date and time of the reverse split, and hold such
shares at the time of the reverse split.
Q: What if I purchase shares of the Company’s common stock on
the open market after the effective date and time of the reverse split?
A: Purchasers of the Company’s common stock after the effective date and
time of the reverse split will not be entitled to any share of the
liquidation proceeds, and will be treated for all purposes as purchasers
of common stock of the post-transaction entity, SinoCoking.
Q: I am or will be a shareholder of Ableauctions at the
effective date and time of the reverse split. If I sell my shares
after the effective date and time of the reverse split, will I lose my
right to receive proceeds from the liquidation?
A: No. Your right to receive a distributive share of the liquidation
proceeds arises from the fact that you hold shares at the effective date
and time of the reverse split. The right to the liquidation proceeds
will not be freely transferrable, and are not attached to the shares of
common stock. Any person who acquires shares from you will only acquire
rights associated with owning common shares, which is separate and
independent from the right to receive liquidation proceeds. That
purchaser would not obtain any right to the liquidation proceeds; you
would retain that right.
Q: What is the total amount that will be distributed in the
liquidation of the Ableauctions prior business and assets?
A: The Company estimates it will make total distributions of
approximately $1.25 to $1.50 per share from the liquidating entity to
the holders of its shares on February 5, 2010, over an unspecified
period of time. Because the amount of the distributions will be based on
the amount received by the liquidating entity for the sale of the
assets, less the costs, expenses (including expenses related to currency
conversion) and fees attributable to such sales and the expenses
attributable to the liquidating entity, the Company cannot provide more
than an estimate of the distribution amount, based on its current
Q: When will shareholders receive proceeds from the
A: The Company is unable to provide a firm commitment regarding the
timing of the distributions, however, the trustees of the liquidating
entity intend to proceed with the liquidation process with all due
Q: I hold common stock that is represented by a stock
certificate. How do I exchange my pre-transaction certificates
for new stock certificates?
A: Post-reverse split certificates will be issued in exchange for
pre-reverse split certificates relinquished to Interwest Stock Transfer
Company, Inc., the Company’s transfer agent. The Company intends to
provide information to all holders of physical share certificates with
specific instructions on how to exchange certificates.
Q: I hold common stock through my broker, and the shares I
hold are not in certificated form. Do I need to do anything in
order to receive new post-transaction shares?
A: No. Stock held in street name will be replaced electronically by your
Ableauctions.com Inc. (AMEX: “AAC”) is a high-tech liquidator and
on-line auction facilitator that operates the domains iCollector.com,
Naalive.com and Unlimited Closeouts.com.
As an on-line auction facilitator, the Company, with the experience of
over 3,000 auctions, has developed state-of-the-art technology to
broadcast auctions over the Internet (www.ableauctions.com/technology)
and currently provides the technology and related services to auction
houses, enabling them to broadcast auctions over the Internet.
Top Favour Limited, a British Virgin Islands holding company (“Top
Favour”), through its wholly owned subsidiary Pingdingshan Hongyuan
Energy Science and Technology Development Co., Ltd. (“Hongyuan”),
controls Henan Province Pingdingshan Hongli Coal & Coke Co., Ltd.
(“Hongli”), a coal and coal-coke producer in Henan Province in the
central region of the People’s Republic of China (“PRC” or “China”).
Hongli produces coke, coal, coal byproducts and electricity through its
branch operation, Baofeng Coking Factory, and its wholly owned
subsidiaries, Baofeng Hongchang Coal Co., Ltd. and Baofeng Hongguang
Environment Protection Electricity Generating Co., Ltd. (collectively
referred to as “SinoCoking”).
For further information about SinoCoking, please refer to the Definitive
Proxy Statement of Ableauctions.com, Inc. filed on Schedule 14A with the
Securities and Exchange Commission on November 27, 2009.
For a comprehensive Corporate Update and prior releases, visit www.ableauctions.com.
For more information, contact Investor Relations at [email protected]
This press release contains forward-looking statements, particularly as
related to, among other things, the business plans of the Company,
statements relating to goals, plans and projections regarding the
Company's acquisition of SinoCoking. The words or phrases "would be,"
"will allow," "intends to," "may result," "are expected to," "will
continue," "anticipates," "expects," "estimate," "project," "indicate,"
"could," "potentially," "should," "believe," "considers" or similar
expressions are intended to identify "forward-looking statements." These
forward-looking statements fall within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Act of 1934 and
are subject to the safe harbor created by these sections. Actual results
could differ materially from those projected in the forward-looking
statements as a result of a number of risks and uncertainties. Such
forward-looking statements are based on current expectations, involve
known and unknown risks, a reliance on third parties for information,
transactions or orders that may be cancelled, and other factors that may
cause our actual results, performance or achievements, or developments
in our industry, to differ materially from the anticipated results,
performance or achievements expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ materially
from anticipated results include risks and uncertainties related to the
global recession, the performance of our staff and management, our
ability to obtain financing, competition, general economic conditions
and other factors that are detailed in our Annual Report on Form 10-K
and on documents we file from time-to-time with the Securities and
Exchange Commission. Factors that could cause our real estate
development results to differ materials from anticipated results include
delay experienced during any phase of the project development (such as
in obtaining permits) or unforeseen problems (such as labor disputes,
increasing materials costs, or an inability to obtain adequate
financing). Even if we are able to build the project, the market for the
units we build could decline. We cannot guarantee you that our building
projects will be successful or that we will be able to recover the money
we put into them. If our building projects are unsuccessful, our
business and our cash flow will be materially adversely affected. Price
changes may occur in the market as a whole, or they may occur in only a
particular company, industry, or sector of the market. Real estate
values and mortgage loans can be seriously affected by factors such as
interest rate fluctuations, bank liquidity, the availability of
financing, and by factors such as a zoning change or an increase in
property taxes. Since the majority of our investments are held in
Canadian funds, currency fluctuations may affect the value of our
portfolio significantly. There can be no assurance that the securities
and other assets in which we have invested will increase, or even
maintain, their value. Statements made herein are as of the date of this
press release and should not be relied upon as of any subsequent date.
The Company cautions readers not to place undue reliance on such
statements. The Company does not undertake, and the Company specifically
disclaims any obligation, to update any forward-looking statements to
reflect occurrences, developments, unanticipated events or circumstances
after the date of such statement. Actual results may differ materially
from the Company's expectations and estimates.