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To OTC Journal Members:

It is our mission to find opportunities in the small and microcap world that you might not be able to find on your own.  We know there is tremendous interest in IPO (Initial Public Offerings) because there are so many high profile IPOs that we hear and read about from the Main Stream Wall Street Media.  On behalf of our members we have been trying to find these opportunities.  However, before telling you about our first IPO of 2000, a quick update on Hortitech.

Hortitech Name and Symbol Change

Hortitech, our current profile, changed names and symbols yesterday.  As announced earlier, Hortitech has now become MicroAcell, and the symbol has changed to MIXL.  From here forward you can find the stock trading under the symbol MIXL, and if you own the stock your brokerage firm will make the change automatically.

The previously announced $4 million private placement has been completed, and the next step will be the signing of the definitive agreement to acquire NV Memory.  Stay tuned for further updates.

New China Homes- Our First IPO Opportunity of 2000

In December of 1998 we presented an IPO opportunity to our members.  We made the mistake of publishing a contact and phone number at the brokerage firm, and we jammed up their switchboard for three days.  No one could get through on the phone.  This time we have automated the process on the Internet, and it will be much smoother if you follow the simple steps we have laid out for you.

IPOs- How They Work

Most public companies begin trading through an Initial Public Offering (IPO).  Here is the sequence of events that leads to an IPO:

• A Private Company which would like to go public gets together with a Brokerage Firm and plans to do an IPO.  The Brokerage Firm's corporate finance department reviews their business plan, and together they work out an Investment Banking arrangement by which the Brokerage Firm agrees to raise them a pre-determined amount of capital through an IPO.  The company then uses those funds execute its business plan.
• The Company files a registration statement with the SEC which is meticulously reviewed, and several versions of it may be generated prior to the IPO.  The document is known as a Preliminary Prospectus or  Red Herring.
• Once the SEC completes its review, the company is cleared to go public.  The Underwriting Brokerage Firm then negotiates the final price of the stock with the Company, and just prior to the stock opening for trading, clients of the Underwriting Brokerage Firm are allowed to purchase the IPO stock at the predetermined price.  No commission is paid by investors, it is paid to the brokerage firm by the Company.  After all the stock is placed, the stock opens for trading.  The money from the sale of shares which investors purchase goes directly to the Company.
• There are a finite number of shares available for investors in the IPO.  If there is extremely high demand for the shares and a limited supply, the stock will generally open for trading at a higher price that the original IPO price.  If demand is weak the stock may go down.
• You must have an account with the Underwriting Brokerage Firm to be allowed to purchase the IPO shares.  Once the stock is trading, it may be purchased through any brokerage firm in the open market.

New China Homes, LTD (Proposed Symbol NASDAQ NMS: CHOM)

New China Homes is schedule to come public within a few weeks.  The Underwriter is a Barron Chase Securities, a Florida based Investment Banking firm specializing in $8 to $20 million underwritings.

The first IPO we ever featured was Qiao Xing Universal Telephone (NASDAQ: XING), a stock which is followed by many investors today.  This Underwriter for this company was also Barron Chase Securities.

Qioa Xing came public in February of 1999.  The IPO shares were priced at $5.50.  The stock quickly traded as high as $6.25, and then slowly retreated into the $3 range for about seven months.

From November 17th to November 18th, 1999 Qiao Xing exploded up the charts, making a move from a low trade of $3.09 all the way to $27.6875 in two days after International Trade Relations with China were improved.

On December 28th Qiao Xing made one of the largest one day percentage gains we have ever seen.  The low trade for the day was $7.625, and the high trade was $70.  Today the stock trades in the $37 range.

New China Homes is also a China Based Company with the same underwriter, Barron Chase Securities.   Based on the performance of Qiao Xing, we believe that there will be a great deal of interest in New China Homes.  However, past performance is not any guarantee of future performance.

New China Homes describes themselves as a leading developer of large planned residential communities in China targeted at middle income families.

Their market appears to be enormous when one considers that there are roughly 1.2 billion people in China and the country is just beginning to modernize.

In 1999 the company completed and delivered 1,110 homes.  As a result of this performance the company enjoyed $35 million in revenues, and profits of $3.365 million.

One of the most exciting features of this IPO is found within the Red Herring.  The insiders of New China Homes have agreed to forfeit 25% of their shares if the company does not earn $10 million within the first year of business following the IPO.  $10 million in earnings would equate to approximately $.80 per share in EPS, suggesting as substantially higher price than the proposed IPO price if the company can meet this target.

The anticipated price of this new issue is $5 per share, and the company will be offering 2 million shares to investors.  A warrant which is priced at $.125 is also sold along with each share of common stock.  The warrant will trade separately from the common stock under its own stock symbol, and it is likely that this warrant will trade well above $.125.

How to Participate

Mr. Karl Birkenfeld, Vice President of Sales for Barron Chase Securities, will be handling the transactions for our members that wish to participate in this IPO.  Karl is located in the Barron Chase branch in the World Trade Center of New York's financial district.

At the bottom of this section is a link which will take you directly to a sign up page that we have created to facilitate this process.  Sign up on this page if you are interested in this or any future IPOs we may cover.  A copy of the form will be forwarded directly to Mr. Birkenfeld.

After you have filled out and submitted the form, your browser will take you directly to a web site owned and maintained by Karl Birkenfeld for the purposes of streamlining the process of requesting shares in an IPO.  There is a simple six step process which includes reading the preliminary prospectus, which you can find at the site.  Very Important- Follow the simple six step procedures that you will find at the top of Mr. Birkenfeld's home page.

It is very important that you take the time to read the Preliminary Prospectus.  Pay particular attention to the risk factors.  We want you to know exactly what you are investing in.

Conclusion

Our comments on New China Homes are not to be construed as a buy recommendation for this particular IPO.  You should read the Preliminary Prospectus and formulate you own opinion.  If you think that you are investing in an IPO that you can sell on opening day at 10 times its IPO price you need to look elsewhere.

There are high profile IPOs which rocket to ridiculous valuations on opening day.  If you are not a multi-million dollar institution with major Wall Street relationships you will most likely not be invited into those IPOs.

However, individual investors that participated in Qiao Xing Universal Telephone could have gotten those types of returns by waiting for 10 months.  There are no guarantees that Qiao Xing's performance will be repeated in New China Homes.  That's why it is important for you to review the preliminary prospectus to be certain that you want to invest in this company.  After all, it's your money, so invest wisely.

The OTCjournal.com Newsletter is an independent electronic publication committed to providing our readers with factual information on selected publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible. All statements and expressions are the sole opinions of the editors and are subject to change without notice. This profile is neither an offer nor solicitation to buy or sell any securities mentioned. This newsletter is owned by SSP Management, Inc, a wholly owned subsidiary of 1st Net Technologies, Inc ("1st Net").  While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein. The editor, members of the editor's family, and/or entities with which they are affiliated, may own stock in and have other financial dealings with the companies who appear in the publication.  To that degree, this newsletter should not be regarded to be an independent publication.  MarketByte LLC, which authors the content of the OTC Journal on behalf of SSP Management, has been paid a publication relations fee of $30,000 by Barron Chase Securities for this publication.  Neither SSP Management or MarketByte LLC has any formal relationship with New China Homes LTD.  The opinions expressed in this publication are those of the editors of the OTC Journal.   The OTCjournal.com critiques may contain forward looking statements relating to the expected capabilities of the companies mentioned herein.

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF THE EDITORS OF OTCjournal.com.

We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.gov and/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com.   We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at  http://www.sec.gov/consumer/cyberfr.htm.   Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.