Availability of Capital - limited, very limited.  All signs point to start-up $$$ being at $-0-.  Funding for existing entities with a developed sales channel is somewhat better; however, still limited.

Cross Border Listing and Trading - high probability of a fundamental shift from the US markets to those in Europe and Asia.  The debacle of the hybrid mortgage instruments has destroyed, to some degree, the credibility of the US. market.

 General Outlook - Small business will suffer the most difficult economic period since the 1930's, if not worse.  Those with demand for basic consumer services with low overhead and market demand will do quite well.  Others that are betting on having a better mousetrap will never get funded because the $$$ will follow the sure thing.

PIPE Transactions - most of this was hedge fund capital.  Since the SEC and others completely rewrote the hedge fund rules by abolishing short sales (even for a short period of time), this segment of available money will be going to ventures outside the US to maximize returns.

Reverse Mergers - most are based on new financing coming in at closing.  with the hedge funds shut down, there's no $$$.  According, this segment will be depressed for 2-3 yrs.  All of my clients in this market are going into the bunker for quite a while and just maintaining their inventory for when this segment reemerges in the future.  Those that can't maintain their inventory will simply drop off the map.

Small public companies strategic alliances, mergers and other combinations - if they have a proven product that integrates into an existing business, mergers will happen.  Otherwise, look for significant fallout through bankruptcy or simple abandonment to occur in high numbers of both $$$ and entities.

XBRL - what a joke.  giving analysts the capacity to perform more manipulations and comparisons that may or may not be relevant to pump predictions and buy/sell recommendations into the marketplace is simply irresponsible.  this effort should be killed.  further, the recommended publication method is using ONLY Microsoft Word and/or Excel.  What about free competition to use whatever software you want?  My shop and many of my peers will have to adjust our in-house processes to convert to the MS products to comply with the XBRL mandate.

Other small public company trends, developments or predictions - 2009 and 2010 will be the darkest periods in US business since the 1930's.  We will see a fundamental shift in how America lives and conducts business.  We've already lost our strength with the shift to IFRS through our "creativity" in financial instruments and reporting.  The rest of the world is bigger than the USA and we're now struggling to stay at the top of the 2nd tier of leadership in the global financial markets.

 

Scott W. Hatfield
S. W. Hatfield, CPA

S. W. Hatfield, CPA focuses on providing quality accounting, auditing and financial reporting services to publicly owned companies reporting to the U. S. Securities and Exchange Commission, their investors and other interested parties with over 14 years of dedicated experience to serving public companies.

Contact us at
9002 Green Oaks Circle, 2nd Floor
Dallas, TX 75243-7212
214-342-9635 (voice)
214-342-9601 (fax)
SWHCPA@aol.com (e-mail)