Rec'd this from an "insider" in the Shelby world, a forwarded email about CSI stock. ----- Original Message ----- From: Richard Kottle To: Richard Kottle Sent: Tuesday, December 21, 2004 8:22 PM Subject: Memo from Shelby's Attorney explaining reasons for delisting Shelby stock Received a memo to Shareholders of Carroll Shelby International, Inc. from M. Neil Cummngs, Esq., General Counsel dated 12-15-04: In part reading: "...The Board of Directors....passed a resolution...to de-register its stock with the SEC...thereby suspending its reporting obligations under the Securities Exchange Act of 1934." "...the Board has requested that an open letter be addressed to all shareholders in an effort to dispel any myths or misunderstandings that may exist as to ...this action." They cited the high costs of reporting what the company's activities and finances were under SEC rules and that this action would provide the "best opportunity to stay in business..." "This action will respond to the concerns of BDO Seidman (the company's) SEC audit firm) to the effect that the Company is in danger of failing within the next 12 months if action is not taken to both increase income and reduce costs..." (emphasis added) Item 7 of the memo discusses the relationship of Shelby and Ford and says that while "significant potential" exists between Shelby and Ford, "these opportunites have not proceeded beyond the building of prototype show cars." And "....the necessary agreements with Ford have not yet been reached to enable the manufacture and sale of the Ford Shelby Cobra to the public..." If you would like the full copy of the memo, provide me with your mailing address and one will be sent. rk Have a healthy New Year. rk Richard Kottle RAI Corporation 13406 Heights Lane, Suite 111 San Antonio, Texas 78230 (210) 764-0425 rkottle@swbell.net www.raicorp.biz Kottle is licensed to practice law in Texas & California
