Interesting angle explored with the Chatbot;
Quikshft-
So the current issued shares number about 285 million. A great majority of that is held by insiders and the float is estimated to be 120 million shares. In the share exchange agreement the company will issue an additional 760 odd million more 'common' shares. Are these new shares immediately tradable?
ChatGPT
Whether the newly issued common shares are immediately tradable depends on various factors, including the terms specified in the share exchange agreement, securities laws and regulations, and market conditions. Here are some considerations:
Lock-up Agreements: The share exchange agreement may include provisions requiring certain parties, such as company insiders or significant shareholders, to enter into lock-up agreements. These agreements typically restrict the sale or transfer of shares for a specified period following the transaction's closing. If lock-up agreements are in place, the newly issued shares subject to these agreements would not be immediately tradable.
Registration Requirements: Newly issued shares may need to be registered with the appropriate regulatory authorities, such as the Securities and Exchange Commission (SEC), before they can be publicly traded. This process involves filing a registration statement and complying with disclosure and reporting requirements. Until the registration process is completed and the shares become registered securities, they may not be tradable on public markets.
Market Conditions: Even if the newly issued shares are eligible for immediate trading, market conditions may impact their liquidity and trading volume. If there is low demand for the shares or if market sentiment is unfavorable, investors may be hesitant to buy or sell, affecting the tradability of the shares.
Trading Restrictions: In some cases, regulatory authorities or stock exchanges may impose trading restrictions on newly issued shares to prevent market manipulation or ensure orderly trading. These restrictions could include limitations on the timing, volume, or manner of trading.
Shareholder Approval: Depending on the terms of the share exchange agreement and applicable corporate governance rules, shareholder approval may be required before the newly issued shares can be traded. If a shareholder vote is necessary, the timing and outcome of the vote could affect the tradability of the shares.
Ultimately, the tradability of the newly issued common shares will depend on the specific terms and conditions outlined in the share exchange agreement, as well as compliance with legal and regulatory requirements. Investors should carefully review the terms of the agreement and consult with legal and financial advisors to understand the implications for trading and liquidity.
Quikshft-
Those new shares are issued as payment for Core Optics, correct?
ChatGPT
Yes, based on the information provided in the share exchange agreement, the new common shares are issued as part of the consideration for acquiring Core Optics. In exchange for transferring all of its membership interests in Core Optics to The Coretec Group, Inc., the Member (holding all outstanding membership interests in Core Optics) will receive a specified number of newly issued common shares of The Coretec Group, Inc., as outlined in the agreement. This issuance of new shares is a common method used in mergers and acquisitions to compensate the selling party or parties for their ownership interests in the acquired company.
Quikshft-
Who will hold control of or own those shares?
ChatGPT
The control and ownership of the newly issued shares will depend on the terms outlined in the share exchange agreement and the ownership structure of The Coretec Group, Inc. Following the completion of the exchange, the ownership and control of the shares may be distributed among various parties, including:
The Member: The Member who is transferring its membership interests in Core Optics to The Coretec Group, Inc. will receive the newly issued shares as part of the consideration for the exchange. As a result, the Member or its designees will likely hold a significant portion of the newly issued shares.
Existing Shareholders of Coretec: If the share exchange agreement allows for the participation of existing shareholders of The Coretec Group, Inc., they may also receive newly issued shares as part of the exchange. Depending on the terms of the agreement, existing shareholders may retain ownership and control of their shares or may see their ownership diluted by the issuance of new shares.
Management and Insiders: Key executives, directors, and other insiders of The Coretec Group, Inc. may also be recipients of the newly issued shares as part of compensation packages or incentives. These individuals may hold significant control or influence over the company, depending on the size of their shareholdings.
Other Designees: The share exchange agreement may allow for the issuance of newly issued shares to other parties designated by the parties involved in the transaction. These designees could include strategic partners, investors, or other stakeholders with an interest in the company.
Ultimately, the ownership and control of the newly issued shares will be determined by the specific terms and conditions outlined in the share exchange agreement, as well as the decisions made by the parties involved in the transaction. It's important for shareholders and other stakeholders to review the agreement carefully to understand how ownership and control of the shares will be allocated following the completion of the exchange.
Quikshft-
So if these shares are all subject to a lock down period of a year, the float would remain approximately the same level it is today? If the company should be successful in it's goal of securing development funding, there could be some significant movement of the stock price?
ChatGPT
Yes, if the newly issued shares are subject to a lock-up period restricting their sale or transfer for a specified period, it would likely limit the immediate impact on the float, which represents the number of shares available for trading in the open market. During the lock-up period, the newly issued shares would not be available for trading, which could help maintain the float at approximately the same level as it is currently.
However, once the lock-up period expires and the newly issued shares become eligible for trading, there could indeed be significant movement in the stock price, especially if the company achieves its goals of securing development funding and demonstrates progress or success in its business initiatives. Here are some factors to consider:
Increased Liquidity: The availability of additional shares for trading after the lock-up period could increase the liquidity of the stock, as there would be more shares available in the market. This increased liquidity could lead to greater trading activity and potentially higher volatility in the stock price.
Market Reaction to Funding News: If the company successfully secures development funding or achieves other significant milestones, such as securing key partnerships or reaching important regulatory milestones, it could generate positive sentiment among investors. Positive news and developments could lead to increased demand for the company's stock and drive up the stock price.
Investor Confidence: Successful execution of the company's business plan and achievement of milestones could enhance investor confidence in the company's long-term prospects, leading to higher valuations and potentially higher stock prices.
Market Conditions: It's important to consider broader market conditions and investor sentiment, as these factors can also influence stock price movements. Positive market trends or sector-specific developments could further support upward movements in the stock price.
Overall, while the lock-up period may temporarily constrain the float and limit immediate trading activity, the expiration of the lock-up period coupled with positive developments and investor sentiment could indeed lead to significant movement in the stock price over time. As always, investors should conduct thorough research and analysis to assess the potential impact of these factors on the company's stock price and make informed investment decisions.
Quikshft-
But if there is high demand during the lockup period, that would work to increase the price per share would it not?
ChatGPT
Yes, that's correct. While the lock-up period restricts the immediate availability of newly issued shares for trading, it doesn't necessarily dampen investor interest or demand for the company's stock. In fact, if there is high demand for the stock during the lock-up period, it could potentially drive up the price per share for several reasons:
Scarcity of Available Shares: With the newly issued shares locked up and unavailable for trading, the supply of shares available in the market may be limited. If investor demand remains strong or increases during this time, the scarcity of available shares could lead to higher competition among buyers, resulting in upward pressure on the stock price.
Positive Sentiment and Investor Confidence: If investors are optimistic about the company's prospects and anticipate positive developments following the lock-up period, they may be willing to buy shares at higher prices in anticipation of future gains. Positive sentiment and investor confidence can contribute to increased demand for the stock and drive up its price.
Perceived Value of the Company: Investor perception of the company's value and potential for growth can also influence stock prices. If investors believe that the company's fundamentals are strong and that it has significant growth opportunities, they may be willing to pay higher prices for its shares, regardless of the lock-up period restrictions.
Market Dynamics and Trading Activity: External factors such as overall market conditions, sector trends, and trading activity can also impact stock prices during the lock-up period. Increased trading volume, positive news flow, or broader market trends may contribute to higher demand and price appreciation.
Overall, while the lock-up period may temporarily constrain the supply of available shares, high demand from investors can still drive up the price per share during this time. However, it's important for investors to consider the potential risks and uncertainties associated with investing in stocks subject to lock-up periods and to conduct thorough research and analysis before making investment decisions.
