[Steve Cassani]

Two concerns:

Shelby International appears to be using the income from purchaser deposits to finance operations other than 'Auto' - the Cobra manufacturing/marketing subsidiary. However, only Auto is liable for the contracts with purchasers. Pressure to honor payments on outstanding loans extended to Shelby International may compell managers to risk the liquidity needed to honor the committments made to purchasers of the roadster. Only Shelby International is publically owned and default on a loan has consequences for investor confidence that are not readily softened. Purchasers, on the other hand, can always be reassured, "We're working on it. Give us time."

Sale of additional stock or borrowing are the sole sources of supplemental capital. The stock price has plummeted since the initial offerring, suggesting that investor confidence has expired. The folks who own stock today likely hold on to it for lack of any alternative. Resignation is no motivator to purchasing more. Borrowing may be an option, since the majority of the outstanding debt is is held by Shelby, likely but possibly not in his own name, i.e., a personal loan. Shelby International has not had to compete for dolllars on the open market and so has benefitted from whatever interest rate, payment requirements and failure options Shelby has demanded of a company that carries his name. Whether a commercial lender would treat the loan to Shelby as a debt like any other would depend in large part on the terms and this information is proprietary.

The company's success or failure has significant implications for Shelby's ability to market his name to investors in the future. He may sell designated models of other business' cars and so profit personally. He may never again pursuade investors to participate in a business he owns and so share in the value unique to his reputation among auto enthusiasts.