Good question irishbull.. since the actual condition of CVSU is somewhat murky.. I am not 100% certain but I am assuming Rufus might have had a conversation with a SEC attorney who knows about filing anyway (even though he neglected to discuss compliance and enforcement matters based upon his behaviour). Anyway.. he also mentioned filing an S4 and that would have been my position too. Since CVSU was not a publicly trading company... I think that those shares issued to CVSU shareholders will require an S4 registration to become free trading and that at this point.. only the FHAL shareholders are able to liquidate.
His first act of diluting shareholders of a supposed 800 million dollar company to 45% of their original holdings in order to merge into a troubled bulletin board company with a toxic funding in place... was the first big screwing the CVSU shareholders got. If this was real.. he would not have had to give up more and a few points.. and certainly not 65%. The second is issuing them restricted shares so they can't even liquidate into this market. Its the FHAL shareholders who got the big win here.. both old and new.
So, yes there is substantial dilution but I do not think it represents an overhang at this point and since it will take an S4 going effective or a year's worth of waiting to be able to sell.. it looks to me that they are going to be the big losers in all this. The question is.. how many people did Rufus sell CVSU shares to from the treasury and what representations did he make to get it. I think I know people who are interested in this question...
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