The deal is getting worse for Coretec shareholders. It appears there will be significant issuance of shares to DAF to pay off their debt, with those shares attributed to the Coretec 20%. As the 20% side that we are lumped in with grows, it only means that more shares need to be given to Core Optics to maintain the 20/80 split. (seems the 8K filed Friday contains amendments to the share exchange to deal with this) Long term investment is likely to be stunted on account of the unknowns surrounding the Core Optics side. Are they going to dump their shares? Nobody can say. If they had gone with a significantly longer lock-up agreement, it might have allowed for new investment without the fear of insider sales but in just three months following the close I believe the agreement allows for some structured sales.
I guess the good part is that the debt owed to DAF will be retired - I had posted previously that significant payments (from memory in excess of $100,000) were due beginning next month. This debt would have been inherited by the new company and it would have been responsible for making the payments, but based on the much lower revenue numbers of Core Optics than I was expecting, they probably could not make those payments or it would have been a hardship on the operation. So, they issue a ton more shares and they are assigned to the Coretec 20%. Core Optics obviously wants their 80% of company to not contain any of Coretec's debt. We don't appear to have an advocate, and sort of an Us vs Them mentality has been created. Calling it as I see it, opposing arguments welcome and I hope there are some.
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