Holding Company

A company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. Also called parent company.

Controlling Interest

The ownership of more than 50% of a company's voting stock; or a significant fraction, even if less than 50%, if the rest of the shares are not actively voted.

Going Concern

The idea that a company will continue to operate indefinitely, and will not go out of business and liquidate its assets. For this to happen, the company must be able to generate and/or raise enough resources to stay operational.

Form 8-K

A document required by the SEC to announce certain significant changes in a public company, such as a merger or acquisition, a name or address change, bankruptcy, change of auditors, or any other information which a potential investor ought to know about.

Letter of Intent

A letter from one company to another acknowledging a willingness and ability to do business. A letter of intent is most often issued as acknowledgment of the fact that a merger between companies or an acquisition is being considered seriously. Sometimes, a letter of intent may also be issued by a mutual fund shareholder to indicate that he/she would like to invest certain amounts of money at certain specified times. In exchange for signing a letter of intent, the shareholder would often qualify for reduced sales charges. A letter of intent is not a contract and cannot be enforced, it is just a document stating serious intent to carry out certain business activities.

Insider Report

A report of all transactions in the shares of a company made by officers, directors, and any individuals holding 10% or more of the company's stock. It is submitted each month to the securities commissions and allows the administrators to monitor trading by such people to ensure regulations are not violated.

Wholly Owned Subsidiary

Subsidiary which is owned entirely by its holding company.

Consolidated Financial Statement

A financial statement which covers a holding company and its subsidiaries.

Incorporation

The process by which a business receives a state charter, allowing it to become a corporation.

Corporation

The most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern. The process of becoming a corporation, call incorporation, gives the company separate legal standing from its owners and protects those owners from being personally liable in the event that the company is sued (a condition known as limited liability). Incorporation also provides companies with a more flexible way to manage their ownership structure. In addition, there are different tax implications for corporations, although these can be both advantageous and disadvantageous. In these respects, corporations differ from sole proprietorships and limited partnerships.

Charter

A document, filed with a U.S. state by a corporation's founders, describing the purpose, place of business, and other details of a corporation. also called articles of incorporation

Affiliate

Definition 1: A company in which another company has a minority interest.

Definition 2: More generally, a company which is related to another company in some way.

OEM

A producer that provides a product to its customers, who proceed to modify or bundle it before distributing it to their customers.

Merger

The combining of two or more entities into one, through a purchase acquisition or a pooling of interests. Differs from a consolidation in that no new entity is created from a merger.

Purchase acquisition

Accounting method used in any merger which is not treated as a pooling of interests. The purchasing company treats the acquired as an investment, adding the acquired's assets to its own balance sheet, and recording any premium paid above market price as goodwill, to be charged against future earnings

Consolidation

The combining of separate companies, functional areas, or product lines, into a single one. Differs from a merger in that a new entity is created in the consolidation.

The process of maturation in some markets whereby smaller companies are acquired or run out of business, leaving only a few dominant players; here also called shakeout.

Fairness opinion

The professional opinion of an investment bank, provided for a fee, regarding the fairness of a price offered in a merger or takeover.

Horizontal merger

Merger of two or more companies with similar product lines.

Vertical merger

Merger of a vendor and a customer.

Statutory merger

A merger in which one of the merging companies continues to exist as a legal entity, rather than being replaced by the new entity. opposite of statutory consolidation.

Reverse merger

The acquisition of a public company by a private company, allowing the private company to bypass the usually lengthy and complex process of going public. Acquiring control of a corporation, called a target, by stock purchase or exchange, either hostile or friendly. Generally accepted accounting principles in the United States of America require that the company whose shareholders retain a majority interest in a business combination be treated as the acquirer for accounting purposes.

The balance sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the legal acquirer at historical cost from the date of acquisition. The statements of operations include the operations of the accounting acquirer for the periods presented and the operations (consisting principally of interest expense) of the legal acquirer from the date of the merger.

Delist

To remove a stock from an exchange, usually due to a violation or failure to meet certain financial requirements.

Over-the-Counter (OTC)

A security which is not traded on an exchange, usually due to an inability to meet listing requirements. For such securities, broker/dealers negotiate directly with one another over computer networks and by phone, and their activities are monitored by the NASD. also called unlisted. The computer and phone system through which over the counter (as well as listed) securities are traded.

The OTC Bulletin Board is a regulated quotation service that displays real-time quotes, last sale prices, and volume information in over-the-counter equity securities. OTC Bulletin Board securities are traded by a community of market makers that enter quotes and trade reports through a highly sophisticated, closed computer network. Further information regarding the OTC Bulletin Board can be found on the internet at www.otcbb.com. The Company's ticker symbol will remain "IISL" on the OTC Bulletin Board. However, some quotation services add an "OB" to the end of the symbol and will use "IISL.OB" for the purpose of providing stock quotes.

The National Quotation Service Bureau or the "Pink Sheets"

Nasdaq Small Cap Market

Market for securities of smaller, less-capitalized companies (small caps) that do not qualify for inclusion in the Nasdaq National Market. There are two trading systems that are separate from the National Market: the Over the Counter Bulletin Board (OTCBB) and the National Quotation Service Bureau (NQS), commonly known as the Pink Sheets. Together, the OTCBB and Pink Sheets make up the OTC market in the United States. The OTCBB and the Pink Sheets are quotation mediums, rather than stock exchanges. OTC securities are traded by a community of market makers who enter quotes and trade reports through a sophisticated, closed computer network. The OTC Bulletin Board (OTCBB) is a regulated quotation service that displays real-time quotes, last-sale prices and volume information for approximately 3,700 companies.

What is a Spin Off?

A spin-off is when one company, referred to as the parent, divests (separates) itself of one of its division or subsidiary, which then becomes an independent company.

Common Shares/Common Stock

Securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation. In the event of liquidation, common shareholders have rights to a company's assets only after bondholders, other debt holders, and preferred shareholders have been satisfied. Typically, common shareholders receive one vote per share to elect the company’s board of directors (although the number of votes is not always directly proportional to the number of shares owned). The board of directors is the group of individuals that represents the owners of the corporation and oversees major decisions for the company. Common shareholders also receive voting rights regarding other company matters such as stock splits and company objectives. In addition to voting rights, common shareholders sometimes enjoy what are called "preemptive rights". Preemptive rights allow common shareholders>to maintain their proportional ownership in the company in the event that the company issues another offering of stock. This means that common shareholders with preemptive rights have the right but not the obligation to purchase as many new shares of the stock as it would take to maintain their proportional ownership in the company. also called junior equity or common stock.

Preference Shares/Preferred Shares/Preferred Stock

Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Like common stock, preference shares represent partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Also unlike common stock, preference shares pay a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main benefit to owning preference shares are that the investor has a greater claim on the company’s assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders. In general, there are four different types of preferred stock: cumulative preferred, non-cumulative, participating, and convertible. also called preferred stock.

Sponsored ADR

An ADR which is issued with the cooperation of the company whose stock will underlie the ADR. These shares carry all the rights of the common share, such as voting rights. ADRs must be sponsored in order to be able to trade on the NYSE.

Outstanding stock

The shares of a corporation's stock that have been issued and are in the hands of the public. Also called shares outstanding.

Issue

A stock or bond which has been offered for sale by a corporation or government entity, usually through an underwriter or in a private placement.

Recapitalization

A change in a company's capital structure, such as an exchange of bonds for stock. Recapitalization is often undertaken with the aim of making the company's capital structure more stable, and sometimes to boost the company's stock price (for example, by issuing bonds and buying stock). Companies that do not want to become hostile takeover targets might undergo a recapitalization by taking on a very large amount of debt, and issuing substantial dividends to their shareholders (this makes the stock riskier, but the high dividends may still make them attractive to shareholders). Also, bankrupt companies often undertake a recapitalization as a part of their reorganization process.

Subsidiary

A subsidiary is a company in which the Company, directly or indirectly, controls more than half of the voting power or issued share capital or controls the composition of the Board of Directors.

Associate

An associate is a company, not being a subsidiary, in which the company generally has between 20% and 50% of the voting rights, or over which the Company has significant influence, but which it does not control.

Affiliate

Definition 1: A company in which another company has a minority interest.

Definition 2: More generally, a company which is related to another company in some way.

Reverse Merger

The acquisition of a public company by a private company, allowing the private company to bypass the usually lengthy and complex process of going public. Until now, a private company that wished to “go public” without an underwriting would merge under state law into a “shell” corporation that generally was a “reporting” company under the Securities Exchange Act of 1934. The shell company generally had no operating business and few, if any, assets, but because it was the surviving company in the merger, it was considered to be the “acquiring” company”. The private company technically ceased to exist when the merger was consummated and, despite being the source of the operating business, was therefore considered to be the disappearing company. The transaction was called a “reverse” merger because of the surviving and disappearing company anomaly.

Cusip

CUSIP stands for Committee on Uniform Securities Identification Procedures. A CUSIP number identifies most securities, including: stocks of all registered U.S. and Canadian companies, and U.S. government and municipal bonds. The CUSIP system--owned by the American Bankers Association and operated by Standard & Poor's--facilitates the clearing and settlement process of securities. The number consists of nine characters (including letters and numbers) that uniquely identify a company or issuer and the type of security.

FDA

Food and Drug Administration in America promotes and protects the public health by helping safe and effective products reach the market in a timely way, and monitoring products for continued safety after they are in use. So FDA approval of a product, not only of USA but from other countries also, is of significance for a company.

Fast Track Designation

Fast Track Designation is a term that the FDA ascribes to certain investigational drugs that have the potential to address serious, unmet medical needs. Under this designation, the FDA commits to working closely with the developer of the product to advance it through the drug development process.

Shell Corporation

This type of company is commonly called a "shell" corporation because the company does not have any assets or operations and has been formed for the specific purpose of acquiring all or substantially all of the ownership of an existing business.

Development Stage Company

The term, "development stage company", is defined in the Statement of Financial Accounting Standards No. 7 (Accounting and Reporting by Developmental Stage Enterprises). A company is considered to be in the developmental stage if it is devoting substantially all of its efforts to establishing a new business and either of the following conditions exists: planned principal operations have not commenced; or planned principal operations have commenced, but they have not produced significant revenue.

ADR

American Depositary Receipt Negotiable certificates representing one or several shares. Their face value is stated in dollars and interest is also payable in dollars. ADRs allow American investors to buy shares in foreign-based companies that are not quoted on an American Stock Exchange.

Incorporation

The process by which a business receives a state charter, allowing it to become a corporation

Real Estate Investment Trusts

Real Estate Investment Trusts (REITs) are a way for various investors to invest in commercial and residential real estate businesses. As an investment, REITs combine the features of real estate and stocks. They give an investor a means to include professionally-managed real estate in a diversified investment portfolio.

What is a REIT?

A REIT is a company that owns, and in most cases, operates income-producing real estate, such as apartments, shopping centers, offices, hotels, and warehouses. Some REITs also engage in financing real estate. The shares of most REITs are freely traded, usually on a major stock exchange. A company that qualifies as a REIT is permitted to deduct dividends paid to its shareholders from its corporate taxable income. As a result, most REITs remit at least 100% of their taxable income to their shareholders and therefore owe no corporate tax. Taxes are paid by shareholders on the dividends received and any capital gains. Most states honor this federal treatment and also do not require REITs to pay state income tax. To qualify as a REIT, a company must distribute at least 90 percent of its taxable income to its shareholders annually. However, like other businesses, but unlike partnerships, a REIT cannot pass any tax losses through to its investors.

Fifth Characters

The company's common stock will continue to be traded on The Nasdaq SmallCap Market throughout the exception period, with the conditional listing identified by the character "C" appended to its trading symbol. Accordingly, effective with the open of trading on Monday, May 3, 2004, the trading symbol of the company's securities will be changed from RURL to RURLC

The addition of the "E" to the company's trading symbol indicates that the company has not timely filed its Annual Report on Form 10-K for the year.


Voting Stock

Stock which carries with it voting rights. Opposite of nonvoting stock.

Voting Right

The right of a common stock shareholder to vote, in person or by proxy, for members of the board of directors and other matters of corporate policy, such as the issuance of senior securities, stock splits and substantial changes in operations.

Split

An increase in the number of outstanding shares of a company's stock, such that proportionate equity of each shareholder remains the same. This requires approval from the board of directors and shareholders. A corporation whose stock is performing well may choose to split its shares, distributing additional shares to existing shareholders. The most common split is two-for-one, in which each share becomes two shares. The price per share immediately adjusts to reflect the split, since buyers and sellers of the stock all know about the split (in this example, the share price would be cut in half). Some companies decide to split their stock if the price of the stock rises significantly and is perceived to be too expensive for small investors to afford. also called stock split.

Most stocks also provide voting rights, which give shareholders a proportional vote in certain corporate decisions. Only a certain type of company called a corporation has stock; other types of companies such as sole proprietorships and limited partnerships do not issue stock. also called equity or equity securities or corporate stock.