Thursday, July 16, 2015 2:25:36 PM
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Chicago, IL -- July 16, 2015 -- InvestorsHub NewsWire -- CMG Holdings Group, Inc. (CMGO Pinksheets) today announced a corporate restructuring designed to enhance stockholder value and allow the Company to pursue new growth initiatives. The Companys plan is intended to facilitate strategic mergers and acquisitions currently in various stages of negotiation and discussion while also attracting capital to support CMGs ongoing civil RICO (Racketeer Influenced and Corrupt Organizations) lawsuit against former employees seeking total damages of $20 million.
As part of the financial plan, CMG Holdings is creating a new class of series A preferred shares that will have first priority payout from any litigation settlement. The Company is currently in discussions with SEC counsel and investment bankers to launch an exchange offer for these series A preferred shares for publicly traded CMGO common shares. Under the anticipated program, which is expected to be launched as early as this summer, CMGs Board of Directors expects to authorize a total of 4 million series A preferred shares with a liquidation preference of $1 dollar per share, an annual dividend yield of 5% and a perpetual time horizon. Each series A share shall be exchanged for 50 common shares, which will subsequently be returned to treasury. If fully subscribed, including reserves for future dividends, this exchange program would reduce CMGs common shares outstanding by up to 175 million.
We believe that this will reward those shareholders of ours that are most interested in the possible recovery from prior employees alleged misconduct and at the same time significantly reduce the issued and outstanding shares, said Glenn Laken, Chairman and CEO of CMG, adding Management is committed to this effort and intends to convert all of its accrued compensation and money for expenses into the exchange offer. We are in discussions with numerous institutional investors to test the waters on our plan and the results have been encouraging thus far.
Investor Relations
CMG Holdings Group, Inc.
773-698-6047
Source: CMG Holdings, Inc.
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