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I think they're still doing the financial statement audit, and they might not have started that until the week of 11 or 18 of Mars.
Mar 20, 2024, 8-K
Exhibit 99.2
"Further, Core Optics' financial statements are currently being audited. The Company cannot publish financial information until the audit is complete and plans to do so when appropriate."
The duration of a financial statement audit can vary based on several factors. Let's delve into this:
1. Purpose of the Audit:
* A financial statement audit aims to provide assurance that a company's financial statements present a "true and fair" view of its financial performance and position.
* Stakeholders, including investors, rely on these audited financial statements to make informed economic decisions.
2. Typical Duration:
* an audit takes approximately 1 to 3 months to complete.(1)
* However, keep in mind that this timeline can fluctuate based on various considerations.
3. Factors Influencing Audit Duration:
* Company Size: Larger companies may require more extensive audit procedures, leading to a longer duration.
* Preparation: Adequate preparation by the company can expedite the audit process.
* Complexity: The complexity of financial transactions, reporting standards, and internal controls affects the audit timeline.
* Scope: The scope of the audit (e.g., financial statements only or including internal controls) impacts the duration.
* Industry: Certain industries have unique accounting practices that may affect audit complexity.
4. Audit Stages:
* Planning: Typically lasts around 4 weeks.
* Fieldwork: Involves detailed testing and analysis, lasting approximately 4 weeks.
* Compilation of Audit Report: The final stage, which also takes about 4 weeks.
Remember that these timeframes are approximate, and actual durations may vary based on specific circumstances. Ultimately, the auditor provides a professional opinion on the accuracy of the financial reporting at the end of the engagement(²).
Source: Conversation with Bing, 4/4/2024
(1) Best Practices for Your First Financial Audit - 8020 Consulting. https://8020consulting.com/best-practices-for-your-first-financial-audit/.
(2) How long will my audit take? | Risk Management & Audit Services. https://rmas.fad.harvard.edu/faq/how-long-will-my-audit-take.
(3) Audit - Overview, How It Works, Stages and Levels. https://corporatefinanceinstitute.com/resources/accounting/audit/.
(4) Understanding a financial statement audit - PwC. https://www.pwc.com/im/en/services/Assurance/pwc-understanding-financial-statement-audit.pdf.
Walrus,
Does this mean that the share agreement has been met? Can this closing potentially occur this month? Thanks 🙏
Matt Kappers had said that they just had a few Due Diligence items remaining ( section M ) which is the last section of a merger before close
Section L has obviously been completed on financial audits since Matt said they just have a few open due diligence items open .
Matt , " At this point, we have a few open due diligence items, and once those are completed, we'll move
towards closing. In addition to due diligence, we are working on transition items so the
integration between the two companies will be seamless "
So just a few probably means 3 or 4 of these listed below . We have to be getting close to the closing... I separated them to more easily view :
(m) Due Diligence. The completion of due diligence satisfactory to Parent, including, but not limited to
The examination of all books and records of the Company and the Operating Subsidiary
Any vendor agreements
Any marketing agreements
Any financial projections, business or marketing plans
Any letters of intent, memoranda of understanding, or potential agreement with marketing or other partners
Any licensing agreements, grant applications, grant notifications
Any intellectual property, current and proposed inventions, all work papers
Any trade secrets or any other material as reasonably necessary to conclude the transactions contemplated by this Agreement.
Matt from the call , " Further, we have nothing but praise for the Coreoptics
management team. They have and continue to be put to react to our due diligence requests, and
they consistently deliver more than we ask for.
Last thing they will do ..Section N
(n) Approvals. The approval of this Agreement and the transactions contemplated herein by the Member, and its Board of Directors or
similar management of the Member and the Company ; and the Board of Directors of the Parent in accordance with whatever consents and approvals are
required by applicable law.
All other sections are after close
Possibly an interesting post from Michelle Tokarz:
https://www.linkedin.com/posts/michelle-tokarz-8908a814_another-successful-customer-discovery-program-activity-7182118635224670210-5Y5I?utm_source=share&utm_medium=member_android
Hopefully she's talking about working the business and manufacturing model for Endurion. Interesting names amongst the "likes" and comments.
More information on timeline of merger/aquisition:
https://www.attractcapital.com/how-long-to-close-acquisition-financing.html#:~:text=All%20acquisition%20financings%20start%20out,way%20to%20the%20secondary%20processes.
Stages of acquisition/merger:
https://www.pwc.com/mt/en/publications/tax-legal/mergers-and-acquisitions-5-stages-of-MA-transaction.html
I was wondering why the Oklahoma Secretary had to approve shares...The corp is still registered in Oklahoma. I thought the registration defaulted to Virginia with The Coretec Group/3DIcon merger.
I suspect Core Optics came to this wedding with a dowry hence the reverse merger. That purse will probably be used to buy, build or lease a larger facility with expansion stages adding on or utilizing unused space initially. I think a building (build to suit) lease will be their first major expenditure unless Dr Kim comes with a box of dreams with detailed plans and tax advantages mapped out. I look forward to peaking in his brain and seeing the vision we all hope he's bringing.
From the share exchange agreement;
(q) Principal Place of Business. Following the Closing, the Parent’s headquarters and research and development and other facilities will remain at the Parent’s current headquarters except that the Company’s management shall have the right to designate a replacement headquarters at an appropriate time.
There is a wealth of information in that document, but to this point it does not appear we are relying on it too greatly to determine what is going to happen. I provided key portions to the ChatGPT bot and asked it to summarize and timeline the major events it contained - results as follows and note that bolds and underlines are by me to call attention to certain details we've been discussing here.
1 Acquisition Announcement: Coretec Group announces its intention to acquire Core Optics, a company with a solid revenue stream and growth potential.
2 Due Diligence: Coretec Group conducts due diligence to assess the financial health, market position, and growth prospects of Core Optics.
3 Negotiation and Agreement: Coretec Group negotiates terms with Core Optics, including the purchase price, payment structure, and any conditions of the acquisition.
4 Share Exchange Agreement: Once terms are agreed upon, Coretec Group and Core Optics sign a share exchange agreement outlining the details of the acquisition, including the issuance of new shares by Coretec Group.
5 Approval Process: The acquisition and associated share issuance may require approval from regulatory authorities, shareholders, and other stakeholders.
6 Execution of Agreement: Upon receiving necessary approvals, Coretec Group and Core Optics execute the share exchange agreement, formalizing the acquisition.
7 Share Issuance: Coretec Group issues new shares of common stock to Core Optics shareholders as part of the acquisition consideration. Additionally, Coretec Group may issue preferred shares to certain investors as part of a private placement to raise additional capital.
8 Conversion Agreement: Holders of preferred shares, including the series C preferred shares, enter into a conversion agreement with Coretec Group, outlining the terms under which their shares will automatically convert to common stock.
9 Reverse Split Consideration: If the issuance of new shares, including the conversion of preferred shares, would exceed the approved share limit, Coretec Group may consider implementing a reverse stock split to reduce the total number of outstanding shares and make room for the newly issued shares.
10 Shareholder Communication: Coretec Group communicates the details of the acquisition, share issuance, and potential reverse split to its shareholders through regulatory filings, investor presentations, and other channels.
11 Implementation: Coretec Group executes the reverse split, if deemed necessary, and completes the issuance of new shares. The company continues to operate with Core Optics as a wholly-owned subsidiary, leveraging its revenue and growth potential to enhance shareholder value.
The phone number on the Core Optics web site 571 area code is a Virginia phone number for inquiries ... Is it a company number they will have for their office in Virginia after the merger closes ?? Where will the CCM side headquarters be ?? Will it be at the Michigan innovation headquarters where the battery program is or will the CCM side of the company be located somewhere else in Michigan or Virginia ?? CRTG is a Oklahoma corp but is in Michigan .Core Optics is a Virginia Limited Liability so will they establish the US base in Virginia or with the current office in Michigan or close to it in Michigan . Good questions any thoughts ..
I believe any decision on a reverse split would come later after they see how the new company stock price reacts . I think they would give it a while. Lets say we trade up to 75 cents , of coarse we want multiple of dollars , but lets say 75 cents and it settled in around there as an example . An 8/1 RS puts it at 6 Bucs 2.00 above the 4 dollar mark they would need to trade at as one of the things they have to do to qualify for Nasdaq . Lower level Nasdaq I think is 3 Bucs. If we settled in higher the split would be less . Keeping in mind the company is talking about building a battery giga plant which might involve some dilution in some way lets say they acquire a company they need we may see more dilution before a RS. I say they will wait sometime to develop the new company and and also see how it trades with news and developments within the next year. Remembering they are locked up for a year they can't trade themselves on the market for a year I see this next 6 months as a time to develop the company and grow to the point they feel they are ready for the bigger exchanges . Maybe then they have the data they need from the company financially and they have good developments from the silicon anode battery and established new partnerships etc etc then they can better make a decision on a RS .
Gunny & Test 🧑✈️,
I don’t see the new ceo keeping the share price down this low for very long after closing and consolidation . I got the impression that he is a business man on a mission to enter the electric automotive industry. I feel that he will take steps to increase the share price . That way looks like a r/s. I hope that I eat my words. But we shall see hopefully soon…….
There will be two (or more) avenues for PPS to move. The first is organic manufacturing and value added partnerships of the working company. The second is RND breakouts that shake the market. Endurion being the most notable but not the only pie in the oven. We should see slow manufacturing growth at first as they consolidate then real advancements in the manufacturing side that will drive PPS. The effect of the RND side will be so random I don't dare even pretend to predict a time frame other than to say I HOPE they had a plan before the merger that they will initiate upon completion...
Yes, everyone has choices and needs to decide. Hold, sell some, sell all, buy more etc. I am holding on to see what happens because my opinion is that even if the acquisition and short term is at the outset weak, the coming months will be positive as the combined company gains traction in its current market which is growing and as it expands into related markets. The wild card is Endurion, there will still be announcements regarding development partners and material delivery and testing and these things need to happen soon based on their own timelines. If the names of these partners are familiar that will create some buzz.
Time is of the essence as is said, Coretec is not the only company trying to bring a version of silicon anodes to the market. Cautiously optimistic here.
If we close at the end of May or the first week of June, those shares will not be available to trade until six months to a year later.
In other words, there is a good chance that it's only going to be a little over a billion shares or less outstanding after the closing. Also, a lot of those shares, if not all, are restricted for six months to a year.
Coretec has 1.5 billion shares authorized, but only 301 million shares are outstanding.
If you start and incorporate your own business, you must authorize shares. When you incorporate, you might choose 1000 (your accountant will not be happy about such a low share count) or million or billion shares. But that does not mean that you are going to use them for anything at this time.
Now, you have two companies merging, one public and one private corporation, so we won't know how they will handle that until the final agreement.
It's easy to see that they have control, all we can do is either watch and wait, or sell out. In that I like the technology they're bringing together here, I'm willing to watch and wait, and perhaps buy more if I like what I'm seeing. I mentioned EPAZ earlier today, and they too are doing some things that are apparently are also under management control. They too are working on improving batteries and drones. I believe if both companies worked together they could really produce superior products.
Gary
Quick Shift & Test Pilot 🧑✈️,
That’s an enormous amount of Outstanding Shares! Guys I see a r/s on the horizon! Hopefully a small one. CEO will want to be in dollar land & on the Nasdaq ,if Endurion is to be commercialized this year or next! CEO will want the most exposure to the world for Endurion and C-Space! That’s why I bought more shares this past month in case of a r/s. I hope this closing doesn’t drag out for months. Hopefully Coretec has moved into the new office space with the new battery testing equipment. I’m ready to rock & roll……
That's one option, but the share exchange agreement mentions 'corporate action' aka reverse split. Seems very few here are for it, but we have no voice and it is apparent what they intend to do. The question is - do you buy the dip that follows??? Can't really say without some important statistics.
I used 1.5 Billion as the current limit, since that is currently the case with the authorized share limit, unless the Secretary of State in OK authorizes more
This is a good article from 2019 which i previously posted with others , but it says a lot about ismedias partners and customers and then business operations which as we know have changed as to the focus to be more on the auto industry https://www.thelec.net/news/articleView.html?idxno=295
ISMEDIA produces single and dual camera module inspection equipment and car camera module inspection equipment. The company also developed Active Alignment equipment, which handles the entire process of assembling and inspection of camera modules at once, by entering part of the front-end process market.
Founded in 2002, ISMEDIA is headquartered in Anyang, Gyeonggi Province. It was listed on the KOSDAQ in 2017. Its Chinese subsidiary was established in 2015 and its US corporation was established last year. ISMEDIA's sales grew 48.3% YoY to 79.0 billion won while operating profit rose 71.0% YoY to 4.1 billion won.
I just googled isMedia Korean news and these news releases came up i will look for more
from the 2019 news release https://www.thelec.net/news/articleView.html?idxno=295 Q Tech has 1.3 trillion won in sales not isMedia
34 billion won is 25 million US
In the sales of ISMEDIA, exportation occupies a large share. The exports to China account for two-thirds of the company's total sales. Q-Tech is the biggest client of last year with sales of 1.30 trillion won. Last year, the company delivered 34 billion won worth of inspection equipment to Q-Tech. In the same year, the company exported 18 billion won worth of equipment to O-Film. Sales from both companies are 43.2% and 22.8%, respectively, of the total sales of the company, which add up to 66.0%.
Old isMedia news releases about deals with major tech companies Sharp and OFilm now Wingtech. It stated they had 78.2 billion in revenue or 57 million US dollars in 2018 but it dropped but in 2019 but as we know from old records that moved back up in 2021 considerably to 33 million and 2022 37 million . I think they might be doing better now with new management .
https://www.thelec.net/news/articleView.html?idxno=295 from 2019 but this deal didnt go through as was a 5.3 million dollar deal but this other article explains in was lowered considerably
https://www.thelec.net/news/articleView.html?idxno=2712 form 2021 this deal was with O Film for work with Apple but was lowered
https://www.thelec.net/news/articleView.html?idxno=3080. from 2021 talks about their work with Facebook through Haesung Optics
https://www.hso.co.kr/eng/company/aboutus
No doubt, earnings will be critical in determining where the share price lands after the close. Of course the number of shares outstanding will also be critical and I'm leaning towards a number of 3 billion. There are 300 million currently, they will issue another 700 million common shares at the close and also 10 million preferred shares that will convert at the close to 1.5 billion common shares = 3 billion. If you read the share exchange agreement it discusses a 'Mandatory Conversion Event" at closing in which all preferred shares are converted to common shares.
I agree, and we may see $50 million in earnings, like isMedia had in 2019 with the CCM business. Using a conservative P/E ratio of 15 and multiply that by EPS, which is .02/ 1.5 Billion you would see a share price of $.50
It could be even higher if the total outstanding shares don’t reach 1.5 Billion after the merger is completed.
Pegs , A lot of these big trades going through look to be at a set price on a pre arranged deal to buy large amounts of stock in one trade . There was a trade a while back that seemed to be like a 3 million share trade go through and the price never changed . If we start having really good news coming out of the new company I think the regular trading community will be buying a lot of stock as the demand goes up for CRTG stock as we will be a company with a new line of products and revenue . Traders will be buying in big news situations possibly more at the ask . Armistice can according to their trading , distribution of their shares agreement can make pre arranged sales of stock at a set price and I think a lot of the trading volume has been from those kinds of trades. We don't see big million share orders at the ask they just go through behind the scenes so to speak . There doest seem to be much demand for the stock YET from the regular type traders as we come close to the close of this merger so the stock hasn't had that big demand for the stock yet like it needs to possibly move higher. I time after the close of the merger we might see the stock move higher as the company starts sharing their financials and in depth company operations and puts out news releases . If the company even has 5 to 10 million in revenue each quarter with good profit margins lots of cash etc CRTG you would think is worth much more than 2 cents.
Liquid Crystal on
Silicon Technology
(LCOS) Market
Research Report |
Voxon Photonics,
Coretec Group, Lightspace
Technology Inc.
O APRIL 4, 2024 & CAROL LAWRENCE
https://www.businessresearchinsights.com/market-reports/liquid-crystal-on-silicon-technology-lcos-market-112028
Thank you to POWER magazine for publishing this insightful op-ed from Coretec's VP of Partnerships and Innovation, Michelle Tokarz, entitled "Improving Lithium-lon Batteries with Silicon Anode Technology."
Michelle details the role li-ion batteries play not just in their ability to maximize to renewable new energy sources.
She also highlights the value proposition of utilizing silicon-based anodes vs. commonly used graphite, a material that is largely controlled and supplied by China.
She argues that adopting silicon will reduce the strain on global supply chains, and ultimately benefit both the electric power and automotive industries, allowing improved #energystorage for the grid and greater adoption rates for #EVs.
https://www.linkedin.com/posts/the-coretec-group-inc_ai-could-revolutionize-a-strained-energy-activity-7181258823498633217-01T1?utm_source=share&utm_medium=member_ios
The audit probably was not started until after the last conference call during which Kappers said there were DD "items" to complete. Also, consider that there probably was no need to begin the audit until after the share exchange agreement was signed. If you can't get that far, there's no reason to open the books for an audit. Still could be some time involved to get this completed.
Gunny,
Thanks for the information. I don't know much about Korean . I got the impression that Dr. Kim wasn't typical ceo. That's great that Koreans are into respect & honor. Something that many penny stock ceo's & board members should practice daily! Instead of toxic financing and reverse splits! I hope that they can close the merger soon!.........
Gunny, I totally agree with you.
The merger will close when the merger closes. I suspect the audit is taking longer than expected because of the added complexity of the foreign assests involved in the deal. Once the Ts and Is are all done the merger will be done. I am personally not concerned with a R/S. While I don’t have a magic 8 ball and you should only take advice from a licensed broker which I am not I believe the incentive is not to R/S but to let the stock grow organicly. Here is my logic. Dr. Kim is NOT a penny stock CEO rather he is a private held company CEO. He is used to taking the time and effort to win the trust of his customers and loyalty of his employees. His goal driven personality that helped him to grow this business should not let him take the "quick and dirty" approach to financing. This is just my opinion but it's also based on my year spent in Korea where I learned that honor and respect are core to their culture. I don't see him taking any easy outs...
Gunny,
When should we be worried about the merger closing? End of this month? The audit shouldn't take long.....right? Coretec knew about this deal before Christmas. I'm concerned about the OS count & possible r/s! I don't trust Penny stock Ceo's! Toxic financing & r/s's have been my experience with them. Do you feel that CEO Kim would go with the AMEX & avoid a r/s? I sure hope so..........
I used to be Logistics Analyst and then later Logistics Engineer under contract for the C17 Simulation and Training program. One thing I found out about Gov contracts - it's NOT what you do that gets you the contracts it is 100% WHO you know. This lineup has the juice to pull the contracts.
We know they are already involved with Ford and Lucid. I would imagine this will increase the volume of their CCM business. However, the fact that they will be based in Virginia leads me to believe they foresee opportunities to get involved with the DOD, as well as some major DOD Contractors like Northrop Grumman, Lockheed Martin, and General Dynamics. The Core Optics LLC board member biographies show significant involvement with the US DoD.
“Michael Ussery
Chairman of Advisory Board
Having served as the U.S. Ambassador to Morocco and as a Senior Advisor to the State Department in 2018, he transformed a U.S. military base into a business hub and co-founded the Romania Moldova Direct Fund. He has held advisory roles within San Leon Energy, General Dynamics, and Philips Medical, and has played a pivotal role in the establishment of the American University of Afghanistan”.
“Mihn Le
Executive Director
A seasoned executive and entrepreneur with over 25 years of experience in strategy, technology, and real estate development. His career highlights include leading roles at Accenture – managing $500 million in business development, and at DoD, overseeing significant defense and aerospace projects”
Core Optics move to the US to include the United States in their business and to now move their focus from smartphones to the auto industry ( now 78 % of business from the auto industry ) is obviously a move to increase the growth of this business of this line of CCM products they purchased from isMedia . They are involved now in China and South Korea and a few other countries they mentioned . I see the potential for a lot of growth in this move . Cant wait to hear more from the new leadership on their plans as soon as this merger closes . Heres a chart that shows the USAs standing in the auto industry which CRTG can now tap into with their new line of CCM products
https://www.statista.com/statistics/584968/leading-car-manufacturing-countries-worldwide/
Different options for distribution of shares under the agreement with Armistice https://investors.thecoretecgroup.com/node/6996/html pages 14 and 15
The Selling Stockholders (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the OTCQB or any other stock exchange, market or trading facility on which the securities are traded or in private transactions.
Each Selling Stockholder may use any one or more of the following methods when selling securities: The selling stockholders will offer their shares at prevailing market prices or privately negotiated prices.
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
settlement of short sales;
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
a combination of any such methods of sale; or
any other method permitted pursuant to applicable law.
Once real news about earnings and future earnings comes out, Armistice selling won't matter; it will add liquidity for investors.
Loaded up at .0191 earlier today
Correct me if I'm wrong but if Armistice or whoever dumps 988000 shares and the price stays the same it means there are waiting buyers for 988000 shares. Since the price didn't fall people WANT CRTG shares and the bargain hunters (I is one) are scooping up shares cheap. Once the merger closes and/or the Armistice are depleted the bargain hunting days will be over and the PPS will have to increase. Tick, Tock I'm not going to watch the clock and let this egg boil in it's own time.
Another day of buying/adding more low-priced shares.
Another Day of dumping shares! No closing on reverse acquisition/merger! Good Grief……
Skitahoe,
I don’t want a r/s in anyway. I’ve been burned 3 times with r/s’s. This will be my last penny stock to hold onto. I believe in Coretec’s products. But I’ve been worried about funding & future r/s for awhile. I’m hoping that the share price can make it to dollar land without a r/s. I guess we will find out soon if not tomorrow…….
Quick Shift, Test Pilot 🧑✈️, Walrus & Gunny,
Amen! Christ fulfilled Gods perfect plan for Salvation for all of mankind! Hallelujah Christ ascended to Heaven at right side of God!…..
In a world gone crazy Jesus is still the answer for the world today ! Sing it Andrae... Happy Easter everyone
I know you didn't ask me, but I believe if after a couple of audited quarters have been filed if we're above $1, but well below $4 I'd prefer to see a listing on the AMEX rather than a R/S to get on the Nasdaq. On the other hand, if revenue is growing and new contracts are anticipated, I'd wait and hope that in another quarter or two they can go to the Nasdaq without a R/S.
Let's see if tomorrow leads us to an announcement that the merger is completed, if so we'll have the entire second quarter in the merged configuration, that's a positive in my mind. If it occurs, and the price isn't up dramatically, I will probably increase my position.
Gary
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