I highly suspect a R/S coming. I believe they will more than likely keep the AS the same, but decrease the OS.
Here's a couple reasons why I'm thinking this. They accepted a rather large amount of shares in this Esko deal as a bonus. That is a signal to me for two things. One, they intend on trading this stock again and two, they intend for a rather large R/S.
Also, the deal with Esko was for $3.8 million. $600k of it is tied up in escrow, so that brings it to $3.2. They have to maintain a minimum balance of $1.3 million for a period of 39 months. Ribotsky is paid $350k to get rid of him. Brad Leonard is given $150k for back pay and bonuses. That leaves a balance of $1.4 million to play with. If Cape is to 'acquire' another company, then that must mean this other company is worth, at most, $1.4 million.
Working with only the facts with what we know right now, the PPS, once trading, would be very low with the current SS. Yes, it could and probably would go up, at least for a while, but then the PPS would begin to out-value the company. Such trading is only temporary as the PPS generally will fall back to actual company value. The new company could grow, yes, but that is just speculation and I'm working with just the facts right now.
Here's another question that has been rattling around in my head. After Cape acquries this new company, how will it be setup? Will Cape continue to be a 'holding company', as was before, with the new company a subsidiary, or will the new company take over Cape? Meaning, would the current BOD's resign and the officers of the new company take full charge?
The plus of this is we finally get some hint of this actually trading again. The bad news is we may never even have a chance to, in the very least, get our original investment back out of this.
AI
